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Europe’s Energy Crisis and its impact on the buildings’ energy consumption

Gaurav Bali
Gaurav Bali

10th October 2022


Energy and environmental issues are directly related since it is almost impossible to produce, transfer, or utilise energy without having a substantial negative impact on the environment. Climate change, water pollution, thermal pollution, solid waste disposal, and air pollution are some of the environmental issues directly linked to the production and consumption of energy. Having said that, Europe is currently battling to manage an energy crisis that threatens to bring about rolling blackouts, the closure of enterprises, and a severe economic downturn. 

The main reason for the crisis is that Russia has cut off the natural gas supplies that the continent had been relying on for years to run companies, produce electricity, and heat homes. The result has been a desperate search by European governments for additional resources and strategies to mitigate the effect as economic growth slows and electricity costs rise. In this blog, we’ll talk about Europe’s energy crisis and how it impacts buildings’ energy consumption.

Energy Crisis in Europe

Energy costs are growing as Europe prepares for the winter. The conflict between Russia and Ukraine is a major factor in the energy price hike. Many European nations have relied heavily on Russia as a source of oil and natural gas. Due to the war and sanctions imposed on Russia, supplies have been restricted. Building and business owners are therefore concerned about the cost of electricity in the upcoming months.

The European Union has taken strong action to diversify its energy supply away from Russia. In addition, the EU put import restrictions on all types of Russian coal as well as all Russian crude oil and petroleum products that are transported by water. The EU has taken two steps to diversify its energy resources away from Moscow in addition to restricting Russian energy sources: first, by obtaining alternate supplies of resources. The Union has made efforts to obtain gas supplies as alternatives to Russia from nations like Qatar, the US, Norway, Azerbaijan, Algeria, Turkey, Japan, Egypt, and South Korea.

Secondly, the EU has proposed a number of initiatives and policies to lessen the effects of the energy crisis like reducing building energy consumption and incorporating renewable resources for energy production. In March 2022, it unveiled the RePowerEU Plan, in which its signatory nations vowed to cut their reliance on Russian energy by two-thirds by the end of the year. The RePowerEU Plan, a detailed road plan for drastically reducing the EU’s reliance on Russian fossil fuels, was unveiled in May 2022. By accelerating and scaling up renewable energy in power generation, industries, buildings, and transportation, it sought to hasten the transition to clean energy. The Renewable Energy Directive’s aim was suggested to be raised from 40 percent in 2021 to 45 percent by 2030 by the European Commission. 

By 2030, the total renewable energy generation capacities will increase to 1,236 GW from the 1,067 GW projected under the “Fit for 55” framework.

How Proper Building Energy Consumption Strategies help in tackling the energy crisis?

Buildings account for 33% of greenhouse gas emissions and 40% of world energy demand. The efforts to combat the energy crisis will be largely dependent on how sustainable and energy-efficient new construction is. Additionally, green buildings can benefit investors, businesses, and employees. How? Let us discuss further.

This year’s global events have been severely impacted by the present energy crisis and the winter hardships in Europe. All impacts, however painful, also present chances to reflect on previous decisions, think more broadly, act more quickly, and create safety nets for upcoming difficulties. It is obvious that Europe can and must become more eco-friendly and productive. To achieve this, businesses, policy-makers, investors, and others must adopt a new strategy where the wider systemic value of investments and policy decisions, rather than limited financial considerations, is central. This strategy also calls for the full utilisation of digital tools and innovations that can hasten the transition to a future with lower carbon emissions.

Buildings play a crucial role in our transition to a future with reduced carbon emissions. They are also the source of around one-third of the world’s greenhouse gas emissions and nearly 40% of the world’s energy consumption because they are where humans live, sleep, and work. 75% of the existing building stock, or over 220 million structures, are energy inefficient in Europe alone, with many of them reliant on fossil fuels for heating and cooling.

According to a European analysis from our System Value programme, switching 20% of the heating to heat pump applications that use clean electricity would result in a 9% reduction in CO2 emissions. Between now and 2030, it might save €3 billion in reduced costs to human health due to lower air pollution. Remember that any structure built today will last for at least 50 years. As a result, it is essential to our efforts to prevent climate change that both new buildings and old ones are decarbonized. 

There are primarily two methods for doing this. The conventional method for lowering the quantity of heating (or cooling) loss is to improve insulation. Consider roof insulation and double glazing. Equipping structures with digital technologies that enable them to automatically adjust heating, lighting, and other systems to the amount of people present at any one time, utilising real-time data analysis, is a more creative, efficient, and economical approach. These so-called “autonomous buildings” are highly effective, entirely electric, and may use solar panels to supply power. They may also be controlled remotely.

Enhancing energy efficiency in Buildings during emergency situations

The effects of the energy crisis are being felt firsthand by governments and people everywhere in Europe. The combination of rising energy and commodity prices, disruptions in the energy supply chain, and financial market turbulence brought on by the military situation underline the need for fresh, creative approaches. This is taking place as the world’s energy consumption rises and numerous companies are resuming energy-intensive economic activity. 

At the same time, governments, the corporate sector, and individual residents have all been under tremendous economic strain as a result of rising energy prices and inflation, with some people now living in energy poverty. The worldwide attempt to reduce carbon emissions may be undermined by changes in the energy market, which might result in money being diverted back into the extractive sectors in an effort to address energy security issues or simply fill the supply gap. How can Europe, in this situation, provide the energy needs of its people while continuing the shift to low-carbon economies?

It is still crucial to carry out or adjust national near- and long-term energy planning and increase the proportion of renewable energy sources in the overall energy mix. Through 2026, an increase in the world’s power capacity is still anticipated to come from renewable sources, with solar photovoltaic systems alone predicted to contribute more than 50%. 

However, it is crucial to combine efforts to boost energy supply with steps to reduce energy intensity and control demand in order to address the energy problem efficiently. The energy we don’t consume is the cheapest. Efficiency in energy use is an endless and universal source of energy in and of itself.

Energy efficiency in buildings, whether they are private, public, or commercial, also provides a way to save energy. About 75% of all electricity produced is used in buildings (both residential and non-residential), but unlike electricity producers, distributors, transmission system operators, metering providers, and retailers, buildings are not regarded as being a part of the electricity “system” or even the electricity “market.” Therefore, it should come as no surprise that building operators don’t give their use of electricity or its consequences any thought.

As a result of Russia’s invasion of Ukraine, public and consumer expenses are skyrocketing throughout Europe, placing tremendous strain on both businesses and homes while driving many people into energy poverty and highlighting the risks of relying solely on the country’s methane gas. 

Russian gas accounted for 155 billion cubic metres (45%) of the European Union’s total gas imports in 2021 alone, but even though boycotts have been launched across the continent, energy costs are still rising. This is partly because gas provides around 25% of the energy demands of the continent, as well as the direct dependence of Europe on gas for industrial and manufacturing purposes. Building communities may take the lead in the region’s dramatic energy transformation by using an integrated strategy that includes five important answers.

Boost decarbonization initiatives

In the EU, where cities are responsible for 70% of all CO2 emissions, the 2050 long-term strategy, the core of the European Green Deal, intends to achieve comprehensive decarbonization of important sectors. This should include steps to increase energy efficiency, step up attempts to electrify and expand methods of offsetting inescapable or remaining emissions, such as replanting.

Boost the use of renewables

One of the ten recommendations in the International Energy Agency’s (IEA) study on lowering Europe’s reliance on Russian gas is to accelerate the deployment of wind and solar energy. Through short-term financing arrangements, municipalities can promote and reward consumers to install rooftop solar photovoltaics in addition to utility-scale projects directly contributing to the nation’s electricity grids. According to the IEA, a grant worth €3 billion that would cover 20% of the upfront costs could treble the rate of investment.

Insulate homes

An effective technique for reducing emissions in the built environment is energy-efficient heating and cooling, which also gives EU municipalities the chance to guarantee sustainable energy transitions. The EU Renovation Wave Initiative promises to double the current 1% annual rate of energy efficiency renovations in the union to 3%. A number of factors make it imperative to upgrade HVAC systems, including the estimated 34 million Europeans who cannot afford to heat their houses sufficiently.

Although it might take some time to scale up, heat pumps offer an economical and energy-efficient alternative to fossil fuel-powered boilers for residential heating. Municipalities can quickly implement smart thermostats and mandate that buildings have less efficient boilers inspected annually.

Deploy connected and smart lighting

Adopting LED lighting systems that are interconnected into the Internet of Things is the simplest and least expensive way to address the energy challenge. The energy expenses associated with lighting can be reduced by 80% thanks to smart LED technology, which has significant advantages given that lighting uses 12% of the world’s electricity.

The EU could save 9.7 TWh annually, which is equal to the annual electricity consumption of 2.7 million households if it converted 20% of all existing conventional light points in public installations (education, municipal buildings, and roads and streets) to LED. Smart connected lighting has the potential to cut the world’s carbon footprint by 553 million tonnes annually, in addition to providing numerous other significant advantages like remote maintenance, occupancy sensing, and UV-C disinfection.

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Modern and effective energy solutions are essential in times of crisis and financial instability to improve countries' energy security, meet the energy needs of their populations, and continue the transition to resilient, low-carbon energy systems. Building managers are in a difficult situation since they must deal with grid strain and green legislation at the same time. This does not imply that the energy crisis cannot be managed, though. The solutions described here are just a small sample of the cutting-edge strategies that operators can implement in place of diesel gen-sets in an effort to address the current energy problem. One last thing that contractors should think about is finding a partner to help them with their on- site energy generation requirements. Employing a specialist gives operators access to a network of industry experts' experience as well as the tools they need to handle the energy issue. One of the most valuable resources contractors can have in such unsettling times is an ally, especially when dealing with a political environment that is changing quickly. Flexibility will likely be the most important factor in this situation, regardless of the path operators choose to adopt, as phasing out diesel while battling grid strain will prove to be no easy task. Given these difficulties, it is obvious that an all-encompassing strategy will place contractors in the best position to address the energy crisis.

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