Ανακαίνιση ενεργοβόρων κτιρίων Τον κρίσιµο ρόλο της ανακαίνισης κτιρίων για τις ευρωπαϊκές πολιτικές απασχόλησης, ενέργειας και συνοχής υπογραµµίζει εκθεση του Joint Research Centre της ΕΕ (JRC, https://ec.europa.eu/jrc/) µε τίτλο "Ενεργειακή Ανακαίνιση: Το ατού για µια νέα αρχή για την Ευρώπη" (Energy Renovation: The Trump Card for the New Start for Europe). Η έκθεση που παρουσιάστηκε στην πρόσφατη εκδήλωση Construction 2020 της Γενικής ∆ιεύθυνσης για την Εσωτερική Αγορά, τη Βιοµηχανία, την Επιχειρηµατικότητα και τις ΜικροµεσαίεςΕπιχειρήσεις(Directorate-GeneralforInternalMarket,Industry,Entrepreneurship and SMEs - DG GROW), ανέδειξε την επιτακτική ανάγκη συντονισµένης προσπάθειας εξάλειψης των ενεργειακά µη αποδοτικών κτιρίων από το ευρωπαϊκό κτιριακό απόθεµα, προκειµένου να αναπτυχθεί η ευρωπαϊκή οικονοµία. Η έκθεση επιβεβαιώνει οτι η ανακαίνιση του κτιριακού δυναµικού της ΕΕ µπορεί να αποφέρει πολλαπλά οφέλη για την αύξηση της ενεργειακής ασφάλειας και της ανάπτυξης µέσα από τη δηµιουργία νέων θέσεων εργασίας για την ενίσχυση της ευρωπαϊκής οικονοµίας, περιγράφοντας µε σαφήνεια την προστιθέµενη αξία των εξειδικευµένων δραστηριοτήτων του κατασκευαστικού τοµέα. Προτείνει δε µηχανισµούς για τη διευκόλυνση της µετάβασης στα ενεργειακά αποδοτικά κτίρια, όπως την οµαδοποίηση των µικρότερων έργων δηµιουργώντας συστάδες αξιόπιστων εταιρειών που θα εξειδικεύονται στην ενεργειακή ανακαίνιση, και την αύξηση της διαφάνειας των δεδοµένων για τα λειτουργικά έξοδα και το κόστος της ενεργειακής ανακαίνισης των κτιρίων. Ακολουθεί το πλήρες κείµενο της έκθεσης (στην Αγγλική).Energy Renovation: The Trump Card for the New Start for EuropeYamina SAHEB Katalin BÓDIS Sándor SZABÓ Heinz OSSENBRINK Strahil PANEV 2015Europe today!!Europe by 2050??Report EUR 26888 EN1European Commission Joint Research Centre Institute for Energy and Transport Contact information Yamina SAHEB Address: Joint Research Centre, Via E. Fermi 2749. Ispra 21027. Italy Email: yamina.saheb@ec.europa.eu Tel.: +39 0332 78 5731 https://ec.europa.eu/jrcLegal Notice This publication is a Science and Policy Report by the Joint Research Centre, the European Commission’s in-house science service. It aims to provide evidence-based scientific support to the European policy-making process. The scientific output expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of this publication. All images © European Union 2015, except those on the front page, which are taken from the following websites: http://en.wikipedia.org/wiki/Thermography and http://campbellthermography.com/ EUR 26888 EN ISBN 978-92-79-43603-1 (PDF) ISBN 978-92-79-43604-8 (print) ISSN 1831-9424 (online) ISSN 1018-5593 (print) doi 10.2790/39989 (online)Luxembourg: Publications Office of the European Union, 2015 © European Union, 2015 Reproduction is authorised provided the source is acknowledged.Abstract Energy renovation is instrumental for reaching the EU 2020 goals. It has implications for growth and jobs, energy and climate and cohesion policies. Renovating existing buildings is a “win-win” option for the EU economy. In 2011, specialised construction activities that include renovation work and energy retrofits employed three times as many people as energy supply to meet the needs of buildings for the same value added. The phasing-out of inefficient buildings from the European building stock requires an EU renovation plan. To be successful, this plan should incorporate the existing EU policy frameworks for growth and jobs, energy and climate and those related to cohesion policies into one single framework targeting the modernisation of the overall value chain of the building sector. Converting Europe’s building stock from being an energy waster to being an energy producer would require a clear, coherent and decentralised governance structure including an Energy Renovation Facilitator and a Risk Sharing Pool cascaded at different levels of governance. Mechanisms to develop projects at scale by bundling smaller projects and to create cluster of accredited companies specialised in energy renovation would also be needed. Utility data must be unlocked and the cost of energy renovation made more transparent so that investment needs could be better assessed. A regional approach prioritising less developed regions, especially those in Member States with per capita GDPs below the EU average, is fundamental to ensuring that all EU citizens can live in comfortable homes and limiting the impact of inefficient houses on public finances and health.'I would also like to significantly enhance energy efficiency beyond the 2020 objective, notably when it comes to buildings, and I am in favour of an ambitious, binding target to this end. I want the European Union to lead the fight against global warming ahead of the United Nations Paris meeting in 2015 and beyond. We owe this to future generations.'Jean-Claude Juncker A New Start for Europe: My Agenda for Jobs, Growth, Fairness and democratic Change. Political Guidelines for the next European Commission, (July 2014).3Table of Contents LIST OF FIGURES, TABLES AND BOXES ..............................................................................................................5 LIST OF ACRONYMS .........................................................................................................................................7 FOREWORD .....................................................................................................................................................8 EXECUTIVE SUMMARY .....................................................................................................................................9 ACKNOWLEDGEMENTS .................................................................................................................................. 12 INTRODUCTION ............................................................................................................................................. 13 CHAPTER 1: QUAND LE BATIMENT VA, TOUT VA! .......................................................................................... 14 IMPACT OF THE FINANCIAL AND ECONOMIC CRISIS ON THE BUILDING SECTOR..................................................................... 16 ECONOMIC VALUE OF THE BUILDING SECTOR............................................................................................................... 17 Value added ................................................................................................................................................ 17 Employment ................................................................................................................................................ 21 ENERGY RENOVATION: A 'WIN-WIN' OPTION FOR THE EU ECONOMY ............................................................................... 25 CHAPTER 2: DISPARITY OF ENERGY CONSUMPTION OF THE EU BUILDING STOCK ......................................... 27 ENERGY CONSUMPTION OF THE BUILDING STOCK ......................................................................................................... 28 Energy consumption by energy carrier........................................................................................................ 28 Energy consumption by end-use ................................................................................................................. 32 BUILDING STOCK’S DEPENDENCY ON GAS IMPORTS....................................................................................................... 34 CONTRIBUTION OF THE BUILDING STOCK TO CLIMATE CHANGE........................................................................................ 36 CHAPTER 3: THE CHALLENGE OF COMFORTABLE HOMES ............................................................................... 38 HOUSEHOLD EXPENDITURE ON ENERGY USED FOR HOMES ............................................................................................. 41 Impact of degree of urbanisation................................................................................................................ 41 Impact of energy prices ............................................................................................................................... 43 AFFORDABILITY OF ENERGY RENOVATION FOR EU CITIZENS............................................................................................ 45 CHAPTER 4: THE BUMPY ROAD TO PHASING OUT INEFFICIENT BUILDINGS ................................................... 48 ENERGY RENOVATION STRATEGIES ............................................................................................................................ 50 Age profile of the building ........................................................................................................................... 53 Blueprint for phasing-out inefficient buildings............................................................................................ 55 FINANCING ENERGY RENOVATION ............................................................................................................................. 59 TECHNOLOGICAL INNOVATION NEEDS........................................................................................................................ 61 CONCLUSIONS ............................................................................................................................................... 63 ANNEX I: ANALYTICAL FRAMEWORK ............................................................................................................. 64 ANNEX II: MAP CATALOGUE .......................................................................................................................... 66 ANNEX III: GLOSSARY ..................................................................................................................................... 97 REFERENCES................................................................................................................................................... 994List of figures, tables and boxes List of tables Executive summary Figure ES1 Figure ES2Energy renovation involves combining different policy frameworks Proposed governance structure for the EU energy renovation planChapter 1 Figure 1.1 Figure 1.2 Figure 1.3 Figure 1.4 Figure 1.5 Figure 1.6 Figure 1.7 Figure 1.8 Figure 1.9Value chain in the building sector Contribution of other sectors to building output Building permits indices The building sector in the EU economic statistics Proportion of value added of the building sector by enterprise size Employment trend in the building sector in selected Member States Contribution of the building sector to regional employment Employment in the building sector by gender and age Value added of the building sector by sub-sectorsChapter 2 Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.4 Figure 2.5 Figure 2.6 Figure 2.7 Figure 2.8 Figure 2.9Final energy consumption per sector Buildings’ final energy consumption by energy carrier Electricity, gas and heat consumption per capita in residential buildings Residential buildings' final energy consumption by end-use Energy carrier used for heating in residential buildings Final gas consumption in buildings as a percentage of total gas consumption Origin of gas imports, by Member State The path to a decarbonised building stock Contribution of the building sector to climate changeChapter 3 Figure 3.1 Figure 3.2 Figure 3.3 Figure 3.4 Figure 3.5 Figure 3.6 Figure 3.7 Figure 3.8Proportion of the population unable to keep their homes adequately warm in winter Proportion of the population living in a dwelling not comfortably cool in summer Impact of degree of urbanisation on households’ energy expenditures Proportion of the population with arrears on utility bills Gas prices for medium size households Electricity prices for medium size households Proportion of the population with incomes above 60 % of median equalised income, by building type, degree of urbanisation and tenure status Proportion of the population with incomes below 60 % of median equalised income, by building type, degree of urbanisation and tenure statusChapter 4 Figure 4.1 Figure 4.2 Figure 4.3 Figure 4.4European Commission's institutions involved in building related policies Impact of discount rate choices on the cost-effectiveness of energy renovation Tenure status of dwellings and their construction period Average home prices in selected Member States5Figure 4.5 Figure 4.6 Figure 4.7Savings potential in residential buildings by construction period Comparative analyses for nZEB and market renovation scenarios EU and EIB funds to support investments in low-carbon economyList of tables Chapter 1 Table 1.1 Table 1.2 Table 1.3 Table 1.4 Table 1.5Added value in the building sector (EU, 2011) Added value in the building sector: 2011 ranking of the top 10 Member States Employment in the building sector (EU) Employment in the building sector: 2011 ranking of the top 10 Member States Economic value of specialised construction activities vs. energy supply activities (EU28, 2011)Chapter 4 Table 4.1Technological innovation needs per economic activity of the value chain of the building sectorList of boxes Chapter 1 Box 1.1Classification of economic activities in the European Nomenclature of Economic Activities of the European Community (NACE)Chapter 3 Box 3.1 Box 3.2 Box 3.3What is fuel poverty? Degree of urbanisation classification Development in gas and electricity prices for householdsChapter 4 Box 4.1Financial and economic parameters influencing the cost-effectiveness of energy renovation6List of acronyms B2B B2C BIM CHP CO2 DR EC EE EED EEEF EEFIG EIB EPBD EU EU-28 FDR GCG GDP GIS ICT IEA IET IRR JRC kgoe MAC MEC MS Mtoe NACE NPV NUTS nZEB PBI PBT PF4EE SDR SMEs TESBusiness to business Business to consumer Building Information and Management Cogeneration or combined heat and power Carbon dioxide Discount Rate European Commission Energy Efficiency Energy Efficiency Directive European Energy Efficiency Fund Energy Efficiency Financial Institutions Group European Investment Bank Energy Performance Buildings Directive European Union The 28 member states of the European Union Financial discount rate Gas Coordination Group Gross Domestic Product Geographic Information System Information and Communications Technology International Energy Agency Institute for Energy and Transport Internal rate of return Joint Research Centre Kilograms of Oil Equivalent Marginal Abatement Cost Curve Marginal External Cost Curve Member States Millions of tonnes of oil equivalent Nomenclature of Economic Activities in the European Community Net present value Nomenclature of Units for Territorial Statistics nearly Zero Energy Building Project Bond Initiative Payback time Project Finance for Energy Efficiency Social discount rate Small and Medium Sized enterprises Thermal Energy Storage7Foreword Much of my research has been devoted to providing analysis how to use energy in the various end-use sectors more efficient and how to develop the means to tackle climate change. In much of the Wuppertal Institute’s work, for which I am honoured to have led for many years, the buildings sector was of singular importance, because of the challenges to find the right policy package to foster more efficient new and existing buildings globally. Technically, especially in Europe we were learning how to build high energy-performing buildings but we have still great difficulties in addressing the existing building stock. We know well the market and technical barriers that hinder the potential savings from being achieved, but we seldom see a vision for an effective way forward.Europe is starting to show strong leadership for energy efficiency. The European Parliament has repeatedly voted for ambitious, binding targets for improved energy efficiency for many years. Both the "near zero energy" standards for new buildings and the long-term roadmap to renovate the existing building stock result from European Parliament's amendments to EU legislation. This new report by the Joint Research Centre provides a way forward that is sensible and feasible. We know how important the buildings sector is and we also know the challenges ahead of us in achieving the full potential for energy efficiency improvements. This report puts the building sector in the context of our European economy and shows that there is a way forward with a realistic renovation strategy. What this report clarifies is how important our buildings sector is to the economy.This report by the Joint Research Centre is important because it tackles existing buildings in a convincing holistic manner and because it shows the importance of the renovation activities within the entire European construction industry. The report provides an important analytical foundation that we can implement the huge potentials to reduce costs and emissions in the building stock and at the same time create new jobs.This fuels the European Parliament's battle to make energy efficiency in general, and above all renovation of buildings, recognised a key priority of the upcoming European Fund for Strategic Investments (EFSI), also known as the Juncker Plan. At least 5 of the 16 billion euros foreseen as EU guarantees under the EFSI should go to energy efficiency to trigger the right investment signal. In addition, technical assistance is of utmost importance when dealing with energy efficiency, and the Advisory Hub of the Juncker Plan should help cities and local actors to bundle small renovation projects into larger bankable ones. This is a unique opportunity to boost European economy and achieve our energy efficiency objectives.This report is essential reading for a wide audience within the energy sector. It also provides important information for the economic community to appreciate the role that the buildings sector plays for economic development and for achieving broader energy and climate objectives. Such an approach should be a welcome addition to the recently announced Energy Union.Prof. Dr. Peter HennickeClaude TurmesEmeritus Professor of Economics Senior advisor at Wuppertal InstituteMember of the European Parliament Rapporteur of the Energy Efficiency Director8Executive summary Energy renovation of existing buildings is a ''win-win'' option for the EU economy as a whole. In 2011, over 11 million people were directly employed in the building sector - five times more than in supplying of energy (gas, electricity and heat) to buildings for the same value added. The sector was responsible for 7 % of EU GDP. Because its structure differs significantly across Member States, the impact of the financial and economic crisis on the sector has varied. In Member States where the construction of new residential buildings makes a big contribution to its economic value, the sector has lost up to 60 % of its jobs since the start of the crisis. In those where activity is more balanced between the construction of new buildings and the renovation of existing ones, the impact has been more limited. This is particularly true in Member States whose recovery measures prioritised the building sector. Specialised construction activities that include renovation work and energy retrofits account for two thirds of overall employment in the building sector. Currently available economic data do not allow us to estimate how much of this is linked to energy renovation work specifically, but the nature of the value chain in the sector suggests that the manufacturing of chemicals, metals and equipment, and professional, technical and scientific activities benefit greatly from such work. These sectors contributed over 50 % to building output in 2011. Small and medium-sized enterprises (SMEs) form the backbone of specialised construction activities related to the renovation of buildings. Energy renovation of existing buildings should therefore significantly increase the contribution of SMEs to the EU economy, especially if workers' skills are upgraded. The building stock is the largest single energy consumer in Europe. Its share of total final energy consumption was 40 % in 2012, making buildings responsible for 38 % of the EU’s total CO2 emissions. Although energy efficiency policies have reduced the final energy consumption of the residential building stock by 2.5 % since 2007, per capita energy consumption has increased, with dwellings becoming larger and households smaller in most Member States. Space heating is the main end-use in residential buildings in most EU countries; 43 % of heating needs were met with gas in 2012. To reduce heating needs and their climate impact across Europe, buildings need to be insulated, heating systems replaced by best available technologies and renewable energy solutions deployed where feasible. Energy renovation of existing buildings is instrumental for reducing energy imports which were 2.5 times higher than the EU-28 trade balance in 2013-2014. The building stock plays a major role on gas imports with 35% of which are consumed by buildings. This was equivalent to 68 % of the EU-28 total gas consumption in 2012. Energy renovation of existing buildings would limit the reliance of buildings (particularly residential ones) on the distribution of imported gas and the attendant risk of disruption. This would free up financial resources currently used for gas imports for further investment targeting growth, innovation and jobs in Europe. This is particularly true for eastern and Baltic Member States which have per capita GDPs below the EU average and which are most exposed to disruptions to gas imports from Russia.9Vulnerable citizens in Europe are most severely impacted by the inefficiency of the building stock and rising energy prices. More and more EU citizens face fuel poverty and arrears in paying their utility bills. In 2012, 11% of the population were unable to keep their homes warm in the winter and 19% lived in dwellings they could not keep comfortably cool in the summer. This is particularly true in Member States with per capita GDPs below the EU average, where over 30% of the population faced fuel poverty. Regionally tailored energy renovation action is needed to improve citizens' quality of life throughout the EU territory. 20% of low-income families live in rural areas in Member States with per capita GDPs below the EU average. Also, it is these countries that have the highest proportions of owner-occupiers (e.g. 97% in Romania). In some, energy accounts for almost 20 % of total household expenditure. An EU renovation plan is therefore needed to phase out inefficient buildings from the European building stock while ensuring a sustainable economic recovery of the building sector. This plan should integrate the existing EU frameworks for growth and jobs, energy and climate as well as those related to cohesion policies (Figure ES1). However, the market uptake of energy renovation will happen only if the proposed solutions are technically feasible and economically viable for all market actors. Figure ES1 Energy renovation involves combining different policy frameworksKey point: Energy renovation involves combining existing EU policy frameworks for growth and jobs, energy and climate as well as those for cohesion policies. Source: Adapted by the authors from 'Modernising Building Energy Codes to secure our global energy future' http://www.iea.org/publications/freepublications/publication/PolicyPathwaysModernisingBuildingEnergyCodes.pdfAn EU energy renovation plan would require a clear, coherent and decentralised governance structure with well-defined responsibilities. An energy renovation facilitator would be needed to prioritise buildings to target first and monitor progress. The prioritisation should be based on the EU 2020 targets in the areas of climate change, energy, growth, jobs and cohesion policies. Utility data should be unlocked and data on energy renovation costs made more transparent through the10use of open-source portals accessible to all market actors. Mechanisms to bundle properties to renovate and to build clusters of accredited energy renovation companies need to be developed. As part of the EU renovation plan, a risk-sharing pool using EU cohesion policy funds and existing national funds would be needed to finance energy renovation where citizens cannot afford it themselves. The aim is to reduce the perceived risks for those investing in energy efficiency. It could be complemented, and its impact maximised, by a shift from grants to preferential loans blending public and private funds to support energy renovation by SMEs (Figure ES2). Together with the energy renovation facilitator, the risk-sharing pool would help create a sustainable, unsubsidised energy renovation market in Europe. Figure ES2 Proposed governance structure for the EU energy renovation planKey point: A clear, coherent and decentralised governance structure is needed to design, finance and monitor the EU energy renovation plan. Source: Adapted by the authors from 'innovative market framework to enable deep renovation of existing buildings in IEA countries' http://www.iepec.org/conf-docs/conf-by-year/2013-Chicago/061a.pdf#page=1Energy renovation will stimulate a new wave of technological innovation. To reduce the cost of deep renovation, there is a need to develop energy renovation ‘kits’ tailored to each construction period, climatic zone and building type, ‘plug-and-play’ manufactured modular components and systems fully integrated with advanced 3D surveying techniques, and innovative insulation materials. If the EU’s building stock is to be converted from being an energy waster to being an energy producer, new technologies will be needed to enable building-to-building and building-to-grid energy interaction.11Acknowledgements This report was prepared under the supervision and the guidance of Heinz OSSENBRINK, the head of the Renewables and Energy Efficiency Unit at the Institute for Energy and Transport (IET) of the Joint Research Centre (JRC) of the European Commission. Yamina SAHEB was the project leader and had the overall responsibility for the design, the development and the drafting of report. Katalin BÓDIS contributed geoprocessing, spatial data analyses and GIS mapping, Sándor SZABÓ contributed financial and economic analysis, Heinz OSSENBRINK provided strategic input and Strahil PANEV data gathering and analysis. Andrea DE LUCA adapted some of the illustrations included in the report. Special thanks go to Rod JANSSEN from Energy in Demand for his guidance in the drafting process and the review of the report. Additional input was provided by other colleagues from the JRC including, Elisa BOELMAN, Jean-François DALLEMAND, Thomas HULD, Marcelo MASERA, Fabio MONFORTI-FERRARIO, Paolo ZANGHERI and Jolanta ZUBRICKAITE. The report benefited from input from many colleagues from other DGs including: • DG Internal Market, Industry, Entrepreneurship and SMEs (GROW) with a special contribution from Antonio PAPARELLA to the chapter on the economic analysis. • DG Energy (ENER), with guidance on the energy and the finance chapters from Tudor CONSTANTINESCU, Pirjo-Liisa KOSKIMÄKI, Paul HODSON, Stefan VERGOTE, Bogdan ATANASIU, Laurent DELEERSNYDER, Bettina DORENDORF, Roman DOUBRAVA, Vasco FERREIRA, Timothee NOEL and Paula REY GARCIA; and • DG Regional and Urban Policy (REGIO), with valuable input from Gergana MILADINOVA, Robert PERNETTA and Maud SKARINGER on the financing section. Manuel DUENAS from the European Investment Bank (EIB) and Peter SWEATMAN from the Energy Efficiency Financial Institutions Group (EEFIG) have also contributed with guidance on the finance section. The authors are thankful to Marilyn SMITH from World Image Edit for initial edits and to Mark OSBORNE from DG Translation (DGT) for final editing.12Introduction The Framework strategy for a resilient energy union with a forward-looking climate change policy (EC, 2015) sees energy-efficient buildings as one of the pillars of energy union. This report seeks to provide the European Commission with a basis for the EU energy renovation plan needed for phasing out inefficient buildings from the building stock while ensuring that the EU building industry is sustainably competitive. The report focuses on residential buildings, as they consume the highest proportion of energy. The energy renovation of residential buildings also contributes to social and territorial cohesion by providing citizens with comfortable homes all year round. The structure of the report is as follows: •Chapter 1 sets the scene by demonstrating that an EU energy renovation plan is a ‘win-win’ option for the EU economy. It outlines how circumstances in Member States differed before and after the economic and financial crisis. It details the structure of the building sector and highlights the value added by specialised construction activities that include renovation work and energy retrofits;•Chapter 2 presents a snapshot of the energy consumption of the EU building stock and its impact on energy imports and climate change. It looks at the vulnerability of the building sector in each Member State to gas supply disruptions and the impact of gas imports on the EU economy;•Chapter 3 highlights the impact of inefficient building stock on the social and territorial cohesion of the EU. It shows how more and more citizens are facing fuel poverty as a result of low-quality buildings, higher energy prices and limited incomes. It addresses the affordability of energy renovation for citizens;•Chapter 4 proposes a blueprint for phasing out inefficient buildings. It highlights the need for a combined framework based on the EU strategies for growth and jobs, energy and climate, and cohesion policies. It highlights the need for a more integrated policy and financial instruments if an EU renovation plan for phasing out inefficient buildings is to be considered. The chapter concludes by providing insights into the technological innovation needed to convert the EU’s building stock from being an energy waster to being an energy producer.13Chapter 1: Quand le bâtiment va, tout va!1 Highlights In 2011: •the building sector accounted for 7% of the EU GDP and almost 9% of total industry employment;•specialised construction activities that include renovation work and energy retrofits contributed 66 % of the value added of the building sector and 68 % of its employment;•enterprises with less than 50 employees generated 72 % of the sector’s value added, while those with over 250 generated 14 %;•enterprises with less than 50 employees contributed 79 % of jobs in the sector;•specialised construction activities that include renovation work and energy retrofits employed three times more people than those supplying of energy to buildings for the same value added.This chapter describes the economic role of the building sector, with a particular focus on its contribution to EU GDP and employment. It starts with some insights into the impact of the financial and economic crisis on the sector across the Member States. It then examines the economic value of the sector in selected Member States. It concludes by highlighting the prominent economic role of specialised construction activities that include renovation work and energy retrofits. This chapter sets the scene for the following chapters, which provide an up-to-date picture of Europe’s building stock, its energy consumption and its impact on social and territorial cohesion in the EU. The overall objective of the report is to identify the challenges in bringing about genuine energy union on the basis of an EU energy renovation plan. The graphs, maps and tables in this chapter show data from 2011, the most recent year for which Eurostat provides consolidated economic data for the building sector at EU level. Where data were not available for 2011, 2010 data were used; this is signalled in a footnote. The building sector plays a unique role in the EU economy. It directly contributes 7 % of value added in the non-financial business economy and about 88 % in the construction sector. It accounts for almost 9 % of total employment in the non-financial business economy. The direct contribution of the building sector to the EU economy takes into account only the economic value of the actual building work (Figure 1.1). Its real importance becomes clearer when one considers the overall value chain in the sector, from the extraction of raw materials to their processing into building supplies and equipment, and use and maintenance. This includes activities such as architecture, design, the real-estate business and banking (Figure 1.1).1'The health of the economy is tied to the building sector economy’ – this is taken from a speech to the French Parliament in 1850 by Martin Nadaud, who was impressed with how building work in Paris was driving activity in all other sectors.14Figure 1.1 Value chain in the building sectorKey point: The value chain of the building sector goes beyond the building work itself. Source: Adapted by the authors from the report on Sustainable Competitiveness of the Construction Sector http://ec.europa.eu/enterprise/sectors/construction/studies/sustainable-competitiveness_en.htmOverall, the building sector has a significant impact on economic activity in other sectors. Building services, business activities and the supply of raw material and equipment are responsible for 70 % of overall building output (Figure 1.2). Also, the building sector has an impact beyond the internal market. Most EU companies operate internationally, so it also contributes to EU exports. Figure 1.2 Contribution of other sectors to building output (EU, 2010)Key point: The building sector fosters economic activity in many other sectors. Source: Eurostat, input-output table — current prices (NACE Rev. 2) [naio_cp17_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=naio_cp17_r2&lang=en15The importance of the building sector for the EU economy extends to its vulnerability to changing economic conditions, i.e. booms and crises, as described in the following sections.Impact of the financial and economic crisis on the building sector Before the financial and economic crisis, the construction of new residential buildings was growing more, and more steadily, than that of non-residential buildings. This was particularly true in Member States where a speculative real-estate bubble combined with high levels of household debt. Other factors influencing economic activity in the building sector include the previous oversupply of buildings in many Member States, reduced consumer and business confidence (which delayed investment plans), constrained finance from lenders due to the crisis, and cuts in public spending (Eurostat, 2010-a & b). Combinations of some or all these factors explain the downturn of economic activity in the sector in individual Member States. At EU level, building permit indices (expressed in new square metres of useful floor area) peaked in 2006 before a downturn in the second quarter of 2007, with the overall index reaching half its peak value in 2010 and still falling in 2012 and 2013 (Figure 1.3). Year-on-year change was greatest in 2008 for residential (-32 %) and in 2009 for non-residential buildings (-21 %). 2Figure 1.3 Building permit indices (m of useful floor area)Key point: The building sector has still not recovered from the economic and financial crisis. Source: Eurostat, building permits — annual data (2010 = 100) [sts_cobp_a] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sts_cobp_a&lang=enIndices did not peak in the same year in all EU countries. Due to national economic circumstances, drastic drops in demand for residential buildings in Spain, Ireland, the United Kingdom and Portugal (EC, 2012-a) severely restricted the activity for the overall building sector. Ireland and Greece reached their peak in 2007 and the building sector in both countries has still not recovered. The index peaked later (2008) in the Czech Republic, Romania and Slovakia, but a year earlier (2006) in Estonia and Bulgaria. Hungary was atypical, in that its index had already peaked in 2004. Bulgaria,16Estonia and Latvia recorded the biggest increases during the period of growth and the largest falls in the subsequent downturn (Eurostat, 2010-a & b). Germany’s building permit index started to fall in 2004, earlier than the EU average, to reach its lowest level in 2009. This could be explained by the end of the construction programme following reunification. The German residential sector has experienced a new upswing in permits since 2011. Portugal is the only country in which the index fell continuously from 2004 onwards; in 2013, it was still among the lowest in Europe. While still decreasing on average in the EU, building permit indices rose significantly in Germany, France, Latvia, Lithuania, Luxembourg and Austria in 2013, as forecasted by the construction industry (Euroconstruct, 2013). When interpreting the indices, however, one should avoid over-optimistic forecasts: an index rise is not always followed by actual output, as some permits remain unused or construction is delayed.Economic value of the building sector Value added •Value added at the EU levelIn 2011, the value added of the building sector reached EUR 427 billion in the EU2, which was 7 % of that in the non-financial business economy. Within the construction sector, the building sector contributed 85 % of overall value added, generating 88 % of employment. Specialised construction activities that included renovation work and energy retrofits (Box 1.1) accounted for 66 % of total building output (Table 1.1). Table 1.1 Value added of the building sector (EU/2011)Total non-financial business economyValue added (€ billions) 6,077Total construction501Construction of buildings144Specialised construction activities Total buildings283 427Key point: Specialised construction activities that include renovation work and energy retrofits add almost twice as much value as the construction of buildings Source: Eurostat, annual enterprise statistics for special aggregates of activities (NACE Rev. 2) [sbs_na_sca_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_na_sca_r2&lang=en2EU-28 (data for Greece and Malta not available).17Box 1.1 Classification of economic activities in the Nomenclature of Economic Activities of the European Community (NACE) The non-financial business economy includes activity in the industry, construction, distributive trades and service sectors. The building sector is part of the construction sector and comprises the construction of buildings and specialised construction activities that include renovation work and energy retrofits (Figure 1.4). The construction of buildings involves using financial, technical and physical resources to realise building projects and construct residential and non-residential buildings. Economic data on ‘specialised construction activities’ cover building and civil engineering completion activities. For this report, we considered only those involving the renovation of existing buildings that impact energy retrofits, e.g. those linked to plumbing, heating, electrical and air conditioning installations, floor and wall coverings, painting and glazing, roofing, plastering, joinery, and building completion and finishing.Figure 1.4 The building sector in EU economic statisticsKey point: Economic activities of renovation work and energy retrofits are embedded in those of specialised construction activities.France made the largest contribution (18.2 %) to the value added in the EU building sector. The UK and Germany contributed 15.4 % and 15.2 % respectively. Of the eastern and central European countries’ much smaller contributions, Poland’s was the largest (Table 1.2). There is no clear pattern in the rate of change. Germany’s contribution rose from 13.8 % in 2010 to 15.2 % in 2011, while Spain’s fell from 13.2 % in 2010 to 10 % in 2011.18Table 1.2 Value added of the building sector: 2011 ranking of the top 10 Member States Value added (€ billion)Proportion of the EU building sector value added (%)Proportion of value added in national non-financial business economy (%) 8.7France77.718.2United Kingdom65.915.46.8Germany Italy Spain65.1 52.1 42.915.2 12.2 10.04.7 7.7 10.4Netherlands22.75.37.3Sweden17.04.08.3Belgium13.93.37.5Poland13.03.07.3Austria11.82.87.3Key point: Five Member States contributed 70% of the value added in the EU building sector. Source: Eurostat: Annual enterprise statistics for special aggregates of activities (NACE Rev. 2) [sbs_na_sca_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_na_sca_r2&lang=en•Value added at national levelBetween 2010 and 2011, the building sector value added to the national non-financial business economy than in previous years in almost all Member States except France, where its contribution remained stable at 8.7 %. In southern European countries, the sector’s contribution was still high in 2011, with 11.4% in Cyprus (13.9% in 2010) and 10.4 % in Spain (11.8% in 2010). In western European countries, the sector made the biggest contribution in Luxembourg, with 8.9% in 2011 (9.6% in 2010), and the smallest in Germany, with 4.7% (Table 1.2). Hungary and Ireland reported the lowest figures, with the building sector accounting for less than 4% of value added in the national non-financial business economy. Despite the impact of the financial and economic crisis on the Spanish building sector, its value added is still the highest one in the EU through the construction of new buildings: EUR 33 billion, or 22%. France contributed most to the EU building sector's value added (18.2% against 10% for Spain in 2011), but only 7% as regards the construction of buildings. This shows that recovery measures in France have targeted the renovation of buildings more than those in Spain (ECORYS et al., 2012). However, the question remains as to how much of the renovation work in France (and elsewhere) was subject to energy requirements. The further investigation that would be required is not immediately feasible because of a lack of detailed data on renovation work.19•Value added by enterprise sizeThe EU building sector is characterised by a high number of micro enterprises. Enterprises with less than nine employees represent 94% of all enterprises active in the sector, while large enterprises represent less than 1%. Enterprises with less than 50 employees generated 72% of value added in the EU building sector, while those with more than 250 employees generated 14%. At national level, the largest contribution by enterprises with less than 50 employees was in Italy (85 %). The lowest contribution by enterprises with over 250 employees was in Greece (4.3%), followed by Italy (6.1%) (Figure 1.5) Figure 1.5 Proportion of value added in the building sector by enterprise size (2011)Key point: SMEs contributed more than 70% of the value added in the EU building sector. Source: Eurostat, construction by employment size class (NACE Rev. 2) [sbs_sc_con_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_sc_con_r2&lang=en20Employment •Employment at EU levelIn 2011, the EU building sector employed 11.5 million people. This was equivalent to 8.8% of total employment in the non-financial business economy and makes the building sector the largest single contributor to EU employment. Within the sector, specialised construction activities that include renovation and energy retrofits provided the most jobs (7.84 million) (Table 1.3). Table 1.3 Employment in the building sector (EU, 2011) Employees (millions) Total non-financial business economy130.7Total construction13.1Construction of building Specialised construction activities Total buildings3.66 7.84 11.5Key point: Specialised construction activities that include renovation work and energy retrofits made the largest contribution to EU employment Source: Eurostat, annual enterprise statistics for special aggregates of activities (NACE Rev. 2) [sbs_na_sca_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_na_sca_r2&lang=enGermany made the biggest contribution to employment in the EU building sector: 14%, as compared with 12.3% in 2010. France’s contribution remained stable at 13.7% and Spain’s dropped to 10.5% from 13% in 2010 (Table 1.4). The Irish sector was one of the lowest contributors, with 0.5%. Table 1.4 Employment in the building sector: 2011 ranking of the top 10 Member StatesGermanyProportion of EU building sector employment (%) 14.0%Proportion of national non-financial business economy employment (%) 6.1%Employees (million)1.61France13.7%10.3%1.57Italy Spain United Kingdom13.5% 10.5% 10.3%10.5% 11.9% 6.7%1.55 1.21 1.18Poland6.4%8.8%0.74Netherlands3.7%7.9%0.42Portugal2.9%10.6%0.34Czech Republic2.9%9.5%0.34Sweden2.9%10.9%0.33Key point: The structure of national economies impacts the building sector's contribution to national employment. Source: Eurostat, annual enterprise statistics for special aggregates of activities (NACE Rev. 2) [sbs_na_sca_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_na_sca_r2&lang=en21•Employment at national levelThe building sector’s contribution to employment at national level varies. Among the 10 Member States employing the most people in the building sector, it ranged from 6.1% in Germany (5.8% in 2010) to 11.9% in Spain (12.8 % in 2010) (Table 1.4). Overall, the sector made the biggest relative contribution in Luxembourg (14.8%) and the smallest in Ireland. The importance of the building sector to national employment is highly dependent on the structure of the national economy. However, the economic and financial crisis led to losses of 30-40% of building sector employment in most Member States. The worst case was Spain, where almost two thirds of building sector jobs were lost between 2005 and 2012 (Figure 1.6). This is mainly due to the structure of the sector, with construction of new buildings accounting for a high proportion of total building output. Figure 1.6 Employment trends in the building sector in selected Member StatesKey point: Member States where the construction of new buildings made the biggest contribution to the value added were most affected by the financial and economic crisis. Source: Eurostat, annual enterprise statistics for special aggregates of activities (NACE Rev. 2) [sbs_na_sca_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_na_sca_r2&lang=en•Employment at regional levelThe building sector’s contribution to employment in the non-financial business economy was much greater in less developed regions in all Member States. The 10 regions with the highest contribution were in France, Italy, Spain, Finland and Luxembourg. Regions where the contribution was lowest were in Ireland, the UK, Germany, Bulgaria and most capital cities (Figure 1.7).22Figure 1.7 Contribution of the building sector to regional employment (2011)Key point: The building sector employs more people in the less developed regions in all Member States Source: Eurostat, SBS data by NUTS 2 regions and NACE Rev. 2 [sbs_r_nuts06_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_r_nuts06_r2&lang=en23The regional distribution of employment in the building sector calls for greater use of the EU cohesion policy funds 3 for energy renovation investment (see Chapter 4). This would also contribute to the EU 2020 strategy for smart, sustainable and inclusive growth (EC, 2010-a), the EU’s 2020 and 2030 climate and energy targets (EC, 2014-c), and EU cohesion policy (EC, 2014-d). As pointed out by the Energy Efficiency Financial Institutions Group (EEFIG), however, implementation of Member States’ energy renovation strategies 4 should involve streamlining, blending and optimising the use of existing EU and national funds (EEFIG, 2015). The objective is to create a fully functional energy renovation market that would increase employment, especially in less developed regions, while reducing energy demand in the building sector. This is of particular importance in Member States with per capita GDPs below the EU average and growing numbers facing fuel poverty (see Chapter 3). •Employment by enterprise sizeThe pattern of employment by enterprise size is similar to that for value added. Enterprises with fewer than 50 employees contributed 79% of jobs in the EU building sector. Again, the biggest contribution from this category nationally is in Italy (92%). The contribution of enterprises with over 250 employees to total employment in the EU building sector is 8.4%, with the lowest national contribution in Italy (1.9%). Regarding the employment by enterprise size, a similar pattern to the value added is observed. Enterprises with less than 50 people employed contributed 79% to EU employment in the building sector. The highest contribution of this category of enterprises to the employment is seen in Italy being 92% of the total employment in the building sector. Similarly, the contribution of enterprises of more than 250 people employed as a proportion of the total employment in the EU building sector was 8.4% on average with the lowest contribution observed in Italy (1.9%). •Employment by age category and gender91 % of employees in the building sector are male (Figure 1.8). Efforts are needed in the sector to achieve the EU targets in terms of gender balance — and also in terms of age balance: 66 % are between 25 and 49 years old. Modernisation of the building sector through the integration of ICT, automated solutions and e-work could create opportunities for women and older people, while also attracting young employees. As the sector is characterised by a high number of SMEs, policy intervention might be needed to train managers (who are usually self-employed) on the benefits of such forms of change.3 4European Regional Development Fund (ERDF), European Social Fund (ESF) and Cohesion Fund (CF). The Member States have drawn up renovation strategies under the Energy Efficiency Directive (2012/27/EU) and the JRC is currently analysing them.24Figure 1.8 Employment in the building sector by gender and age (EU, 2011)Key point: There are significant gender and age imbalances in the building sector. Source: Eurostat, employment by sex, age and detailed economic activity (from 2008 onwards, NACE Rev. 2 two-digit level) — 1 000 [lfsa_egan22d] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=lfsa_egan22d&lang=enEnergy renovation: a 'win-win' option for the EU economy The value added from specialised construction activities that include renovation work and energy retrofits was EUR 283 billion in 2011, the biggest contribution (66%) to value added in the EU building sector. Such activities contributed most in France (EUR 65 billion, or 24%), followed by Germany (EUR 44 billion) and the UK (EUR 32 billion). They contributed least in eastern and central European countries and the Baltic States. Specialised construction activities also made the biggest contribution to employment in the EU building sector, with 7.84 million jobs (Tables 1.1 and 1.3). Value added by activities linked to the envelope of a building (roofing, walls and floor covering, glazing, etc.) was EUR 166 billion the same year, or 60% of the value added in the EU building sector (Figure 1.9). In terms of employment, such activities represented 58% of total employment in the EU building sector, with 6.88 million jobs. These activities are very important for energy retrofits, as reducing heating demand is the main challenge the EU renovation plan will have to address (see Chapter 2). An energy upgrade of the envelope of the buildings and its equipment whenever a building is renovated is a ‘win-win’ solution for the EU 2020 strategy for smart, sustainable and inclusive growth (EC, 2010-a), the EU’s 2020 and 2030 climate and energy targets (EC, 2014-c), and EU cohesion policy (EC, 2014-d). It will enhance the prominent role specialised construction activities already play in terms of value added and employment, while contributing to the EU’s sustainable growth, climate and energy strategies, and to social and territorial cohesion. From an industry perspective, more mature demand for the renovation of existing buildings would be a valuable stabiliser for the building sector (Euroconstruct, 2013).25Figure 1.9 Value added in the building sector by sub-sector (2011)Key point: 60% of the value added is generated by activities linked to the envelope of a building. Source: Construction by employment size class (NACE Rev. 2, F) [sbs_sc_con_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_na_sca_r2&lang=en•Trade-off between energy renovation and energy supplyThe risk of job losses in the energy supply sector if buildings are made more energy-efficient is negligible. Existing power plants and energy infrastructures will not be taken offline if buildings are more efficient. The energy supply sector already creates far fewer jobs than specialised construction activities that include building renovation and energy retrofits. For the same value added, the latter employed almost three times more people than the former (Table 1.5). It is therefore expected that any jobs lost in that sector would easily be made up for by new jobs linked to implementing, monitoring and evaluating the plan for renovating existing buildings. Table 1.5 Economic value of specialised construction activities versus energy supply activities (EU, 2011)Value added (€ billion) 283 215Specialised construction activities Energy supply to meet the needs of buildingsEmployees (million) 7.84 2.13Key point: Specialised construction activities that include building renovation and energy retrofits employed three times more people than the energy supply to meet the needs of buildings for the same value added. Source: Eurostat, annual enterprise statistics for special aggregates of activities (NACE Rev. 2) [sbs_na_sca_r2] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=sbs_na_sca_r2&lang=en26Chapter 2: Disparity of Energy Consumption of the EU building stock Highlights •The building stock is the largest single consumer of energy in Europe. It accounted for 40% of final energy consumption in 2012 and 38% of the EU’s CO2 emissions.•Final energy consumption of the building stock increased by 14% between 1990 and 2012. Gas and electricity were the main energy carriers.•Electricity use increased by 60% between 1990 and 2012, largely as a result of the high penetration of consumer appliances and electronic devices.•The building stock accounted for 68% of total gas consumption in the EU-28 in 2012, which represented 35% of all gas imports.•The building stock’s exposure to gas supply disruptions varies among Member States, depending on the proportion of gas consumed in buildings and the origin of gas imports.Chapter 1 showed the prominent economic role of specialised construction activities that include renovation work and energy retrofits. In this chapter, we highlight the impact of buildings’ energy consumption on the EU's energy dependency and expenditure. The chapter starts by analysing energy consumption by energy carrier and end-use for residential and non-residential buildings. It examines disparities among Member States as regards energy consumption per capita for residential and per GDP for non-residential buildings. It points out the building sector’s vulnerability to gas supply disruptions. The last section presents the climate impact of buildings’ energy consumption. The chapter is illustrated with graphs and maps using data from 2012 provided by Eurostat and/or from ODYSSEE databases. Where consolidated EU data were not available for 2012, data from the most recent year were used; this is signalled in footnotes. Final energy consumption in Europe increased by 10 % in absolute terms between 1990 and 2006, when it peaked at 1 190 Mtoe. Over this period, the proportion accounted by residential and non-residential buildings rose from 35.4% to 37.7% (Figure 2.1), making buildings the largest single energy consumer in Europe. Since the start of the financial crisis, final energy consumption has fallen overall in the EU. In 2007-12, it decreased by 8%, but by only 2.5% when one looks at residential and non-residential buildings only. The decrease in buildings’ final energy consumption mainly affected residential buildings (4%), despite the increase in area (m2) as a result of construction activity prior to the crisis (see Chapter 1). This could be attributed to more stringent building energy codes in all Member States. Portugal experienced the biggest decrease (16%) in the final energy consumption of residential buildings in this period, while Bulgaria and Italy saw the biggest increases (15%).27In contrast, the final energy consumption of non-residential buildings remained quite stable. The biggest decreases were observed in Slovakia and Ireland (22%) and the biggest increase in Slovenia (24%). Efficiency improvements and the fall-back in activity were probably offset by the high penetration of consumer electronic devices. Figure 2.1 Final energy consumption by sector (EU)Key point: The building stock (residential and non-residential) is the largest single energy consumer in Europe. Source: Eurostat, supply, transformation, consumption — all products — annual data [nrg_100a] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_100a&lang=enBuildings are complex systems in which energy consumption is influenced by a combination of factors, including the age of the building, population growth, the size of houses and households, the penetration of appliances and electronic devices, and location (energy demand is affected by climatic conditions). For non–residential buildings, the level of economic activity and the attendant fluctuations in floor area used are the main parameters that explain changes in energy consumption. The interactions between these factors determine a given building’s energy needs vis-à-vis specific end-uses (i.e. heating, cooling, lighting, etc.). Energy consumption in a Member State’s building stock is the result of its choices as to how the heat and electricity to satisfy those needs are produced and distributed. These supply-side decisions are affected by the availability of energy carriers (e.g. gas, oil) in the Member State and/or nearby and determine in turn how vulnerable its building stock is to energy supply disruption. The energy needs and energy consumption of buildings also determine how much the sector contributes to climate change (see below).Energy consumption of the building stock Energy consumption by energy carrier Gas and electricity are the two main energy carriers used in buildings. At EU level, gas consumption as a proportion of buildings’ total final energy consumption rose between 1990 and 2012 to 37% for28residential and 31% for non-residential buildings. Electricity consumption grew 59% over the same period, reaching 25% of the total final energy consumption of residential and almost twice that in non-residential buildings. The use of solid fuels and petroleum products decreased, derived heat remained stable as a proportion of buildings’ final energy consumption, while the proportion of renewable energies increased by around 9% in both residential and non-residential buildings (Figure 2.2). The increased use of renewable energies in buildings was due to new incentives introduced in all Member States as they seek to achieve mandatory renewable energy targets by 2020 and to reductions in the cost of installing some renewable energy products such as solar PV. Figure 2.2 Buildings’ final energy consumption by energy carrierKey point: Electricity consumption in buildings grew by 59% between 1990 and 2012. Source: Eurostat, supply, transformation, consumption — all products — annual data [nrg_100a] http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_100a&lang=enGas consumption patterns in residential buildings are changing slightly at national level. This could be explained by lower heating demand due to milder winters in recent years as a result of global warming. Gas consumption in residential buildings peaked in most Member States in 2005. There have also been changes in gas consumption as a proportion of buildings’ total final energy consumption. In France, this increased from 63% in 2010 to 66% in 2012, while in Germany it fell from 60% in 2010 to 58% in 2012. •Energy carrier consumption per capitaEnergy consumption of the building stock is influenced by various factors including population growth. Electricity, gas and heat consumption per capita is influenced by buildings’ heating needs, acceptable levels of comfort, what fuel is used for heating, the affordability of energy and (in the case of electricity) the penetration of new devices. Energy carrier consumption per capita allows for isolating building energy trends related to drivers other than population such as GDP and floor area.29Overall per capita consumption has changed little in recent years in the EU. Per capita consumption in residential buildings has increased in some countries, such as Denmark, Estonia and Finland, while remaining stable in others. This could be explained by the size of houses increasing (the average is 120 m2 in Denmark, as compared with 40 m2 in Romania, for example) and the size of households decreasing in these countries (an average of 2 persons in Denmark against 2.9 in Romania).Electricity consumption per capita varies among Member States depending on whether the volume of electricity produced encourages its use for heating and whether high prices lead consumers to use less. Countries with high electricity production, such as France and Sweden, have implemented fuel-shift policies for residential heating. Sweden has the highest electricity consumption per capita, with over 355 kgoe per person, followed by France, with over 200 kgoe. In contrast, per capita electricity consumption is below 75 kgoe in eastern countries and the Baltic States (Figure 2.3), where high electricity prices have meant that more people face arrears on utility bills and reduced levels of comfort (see Chapter 3). In 2000-12, gas consumption per capita fell by almost 8% in the EU as a whole, but there were wide variations between Member States. Gas-producing countries such as the UK and the Netherlands have the highest consumption, with more than 400 kgoe per person, followed by Italy, probably because of favourable contracts for importing gas from North Africa. Sweden and Finland have the lowest gas consumption per capita (5 to 50 kgoe), as electricity from hydro plants is used for heating. National data for heat consumption per capita are highly dependent on the penetration of district heating systems, as they do not include heat from building-level central heating systems. Countries with high penetration of district heating systems, such as Sweden and Finland, had the highest figures (200 to 310 kgoe of heat per person). In eastern European countries and the Baltic States, heat consumption per capita ranged from 25 to 200 kgoe. Ho