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By setting an upper limit for the allowed energy consumption of a building, minimum energy performance standards (MEPS; also known as energy building codes or regulations) are used to exclude at least the most inefficient building concepts and technologies from the market. They are most important for new build but should also apply to major retrofits of existing buildings. While MEPS, at cost-effective levels, should be made compulsory by law, higher standards up to Zero Energy Buildings can first be established on a voluntary basis. MEPS should then be tightened step by step every three to five years, until after 10 to 15 years very low energy levels (Ultra-low-energy buildings) have been reached. Advanced countries have already achieved energy savings of 50 to 75 % in today’s new buildings as compared to conventional building practices of the past. An effective control and enforcement regime is essential to ensure compliance with the standards.
The main objective of MEPS is to ensure an increased minimum level of energy efficiency – to raise the floor, so to speak. MEPS, thereby, ensure that a good part of the potential energy savings is harnessed when a building is constructed or significantly refurbished. Banning the most inefficient buildings and technologies from the market reduces transaction costs for market actors and tackles the landlord-tenant and developer-buyer dilemmas. As a result, MEPS help accelerate a market’s transformation in the building sector and its associated product markets such as those for windows, boilers, air conditioners, and insulation materials. MEPS should not only be required for new build but also in case of refurbishment of existing buildings so as to avoid lost opportunities.
Energy efficiency requirements can either be integrated in existing building codes or be established as stand-alone standards. They have evolved over time from simple prescriptive requirements for individual building components, to more complex, performance-based standards ultimately requiring a minimum energy performance of the building as a whole (i.e. a maximum specific energy consumption per square metre per year) (WEC 2008, p.42). In any case a valid and accepted methodology for measuring energy consumption and efficiency is a prerequisite for the introduction of MEPS.
Ensuring compliance with the requirements is a major issue and should thus be given sufficient attention in policy planning and design (cf. IEA 2010 for more detail). Without effective control and enforcement, the envisaged energy savings will not be realised. Credible penalties for non-compliance are crucial in this regard, e.g. fines of EUR 6,000 in Flanders, Belgium (Bowie 2010), or prohibition of building operation or sale in big cities in China (Zhou 2010).
As MEPS will only realise a minimum level of energy efficiency, however, additional instruments must complement the standards as part of a comprehensive policy package. Financial incentives and information should be provided in order to motivate actors to exceed MEPS. Education and training programmes are essential to make sure building professionals have the skills to properly implement the requirements. Demonstration projects, which show that the current as well as the next steps in MEPS are in fact feasible and cost-effective, will prepare and ease their implementation.
In existing buildings, it will sometimes be possible to require immediate action from building owners, e.g. for insulation of attics that is easy and cost-effective to be done. However, in many cases it will be too costly to touch the building envelope or heating, lighting, ventilation and air conditioning systems just for saving energy. Energy efficiency improvements will mostly be cost-effective, when a refurbishment or renewal of the building envelope (walls, windows, roof, floor) and the installed systems is done anyway, so MEPS can be required in case of refurbishment or renewal. However, MEPS will in most cases not trigger refurbishment or renewal. Therefore, other instruments, including energy audits, information and motivation, financing and financial incentives will be needed to trigger and ensure energy-efficient refurbishment or renewal.
Regarding the achievable energy savings impact, it can be generally said that significant energy savings can be achieved, as long as the issue of compliance control is pursued effectively. The concrete effects obviously depend on the stringency of the standards.
Nevertheless, it has also been commonly observed that there is usually a time lag between the introduction of new standards and their full implementation. This may be caused by the time lag between application for a building permit (in accordance with the old MEPS level) and the actual construction phase, but also by behavioural factors and insufficient enforcement and information. Governments should aim to reduce this time lag as much as possible.
MEPS requiring maximum specific energy consumption per m2 of building or component will improve energy efficiency, but not directly limit consumption. The latter is also determined by the size of buildings occupied by a certain number of inhabitants or employees. A possible further improvement is, therefore, to make MEPS progressive: This means stricter requirements, the larger the floor area per capita is. However, this will be difficult to enforce without a lot of bureaucracy. Analysis of typical dwelling sizes by family size and income class may allow to define threshold values for dwelling size, above which the allowed specific energy consumption per m2 may be reduced or even the absolute annual energy consumption may be limited (e.g., for single family homes above 200 m2 in OECD countries).
The main objective of MEPS is to ensure a minimum level of energy efficiency and to avoid locking in huge amounts of potential energy savings when a building is constructed or significantly refurbished. In addition, banning the most inefficient buildings and technologies helps accelerate market transformation in the building sector and its associated product markets such as those for windows, boilers, air conditioners, and insulation materials, as both builders and component suppliers are induced to innovate in order to comply with the requirements.
There are two main types of MEPS govern¬ments have to choose from when planning to introduce building standards: prescrip¬tive and performance-based standards.
Prescriptive standards set individual requirements for building components, installations and design options such as building orientation or number and size of windows. The requirements most commonly applied are heat transfer coefficients (U or K values) for walls, roofs, and windows as well as design specifications for HVAC installations. Prescriptive standards are easy to understand and implement, but they are also inflexible, and they do not allow designers to optimise for lowest construction cost (IEA 2008a; Goldstein 2006).
Performance-based standards on the other hand set a maximum value for the energy consumption (or CO2 emissions) of the building as a whole. Provided that there is a viable and accepted calculation methodology in place, designers and builders usually prefer this method since it gives them the freedom in the design process. This has economic as well as policy advantages: it encourages building designers to save money and fosters innovation (IEA 2008a; Goldstein 2006). However, better trained building professionals and inspectors are needed to implement, and control compliance with, such performance-based requirements (SBCI/CEU 2007, p.19).
Performance-based standards can also be combined with prescriptive standards on specific equipment or components (insulation, windows, boilers), so as to ensure that the most efficient equipment is used when retrofitting existing buildings (WEC 2008, p.42).
According to a survey of more than 80 countries (33 of which are OECD Member Countries), 40 countries had established mandatory MEPS, 21 had voluntary and/or mixed standards, 11 had proposed standards, and 9 did not have standards as of 2009 (Janda 2009). More recently, Iwaro and Mwasha (2010) used the same methodology for a survey to which 53 developing countries and emerging economies responded. Out of these, six had mandatory MEPS, 12 had mixed mandatory and voluntary MEPS, and ten had proposed standards, with the remaining 25 having no standards.
MEPS are usually defined at the national level. Yet, there are also cases where the requirements are set at the regional, federal state or even local level. Even in federal systems, it will be better for the markets to set harmonised MEPS at a higher level; although there are examples such as India, where it has only been at the local level that MEPS could first be made mandatory.
Due to the special importance of building energy performance for national climate and energy targets, and also with a view to ensuring a level playing field and planning security for the concerned supply chain actors, we recommend, however, to establish MEPS at the national level, with adjustments to regional/local circumstances (e.g. climatic) when deemed appropriate.
MEPS are applicable in all sectors, but should be defined separately at least for residential and non-residential buildings. However, we recommend considering even further differentiation of requirements, e.g. for offices, retail, education, hospitals, and production.
Only MEPS for buildings are discussed here. These should, at least, take into consideration space heating and cooling, including ventilation; but if possible, also sanitary water heating. In non-residential buildings lighting should be considered.Buildings concepts:
When a government introduces MEPS, it should ensure that education and training programmes are available at the same time so that the relevant market actors have the necessary expertise and skills to implement the requirements. Together with demonstration projects and feasibility studies demonstrating adequacy and cost-effectiveness of the requirements imposed this will prepare and ease their implementation, and also ensure that the expected energy saving impact is achieved.
Since MEPS are primarily aimed at cutting off the worst practices from the market, they should always be combined with other policies that encourage energy performance levels better than the minimum standard. This can avoid lock-in effects and make the standard dynamic. Financial incentives as well as information, including mandatory energy performance certificates, and advice are crucial in this regard.
For existing buildings, such other instruments, including energy audits, information and motivation, financing and financial incentives will be needed to trigger and ensure energy-efficient refurbishment or renewal at all.
Agencies or other actors responsible for implementation
A government agency must be assigned with the task of control and enforcement.
Some basic funding is required for methodology development, enforcement of the standards, and for provision of training, but overall funding requirements remain rather low compared to other policy types.
A valid and accepted methodology for measuring energy consumption and efficiency is a prerequisite for the introduction of MEPS. Data on the energy-related characteristics of the building stock and on energy consumption patterns is needed.
A sufficiently skilled workforce in the building sector is another important pre-condition for successful implementation.
Government: taking lead in steps of design and implementation and enacting legislation (see below); establishment of appropriate complementary measures within the policy package
Scientific experts and possibly building professionals: development of measurement and calculation methodologies and training; life-cycle cost analysis
Building permission authority or independent assessors: compliance control and enforcement
Architects and builders: actual implementation of the energy performance requirements; the one who is in charge of steering the construction process: depending on the actor constellation this can be the investor-occupier him-/herself, the developer, the architect/ civil engineer, the manufacturer of pre-fabricated houses, the energy consultant, or various combinations of these actors
It is possible to estimate ex-ante how much energy can be saved through MEPS by comparing the energy consumption of a (conventional) reference building with that of a building built in accordance with the MEPS. In combination with the expected new-built/refurbished floor area, a concrete energy savings target can be determined.
As an operational target, governments could also target a specified rate of compliance.
Co-operation of countries
For countries planning to introduce MEPS, it may be helpful to exchange knowledge, experiences and lessons learned with countries that already have a long tradition with this instrument. Especially in terms of calculation methods and design tools, such international knowledge transfer can significantly reduce policy implementation costs and time.
National authorities can establish a monitoring system tracking the data per m2 of new or renovated buildings and on the planned, or better on the actual, energy performance in kWh/m2/year submitted to the (usually local) building approval offices. The building approval offices will have to collect and forward these data to the national monitoring system. An alternative, particularly for existing buildings that undergo an energy-efficient renovation, may be to collect data from Energy Performance Certificates (EPCs). This will be easy if the EPC data has to be disclosed. It will be necessary to distinguish between new and refurbished buildings. Random inspections may be used to validate that buildings are in fact built or renovated in accordance with plans and savings are achieved. In this way, energy savings not realised due to non-compliance can be estimated and minimised at the same time if there are penalties. Furthermore, empirical surveys of investors and users may be carried out to estimate side effects such as direct rebound effects, free-rider and spill-over effects. Based on this data, energy savings compared to conventional new buildings before MEPS introduction or compared to the energy performance level of the existing buildings before renovation can be calculated.
In order to evaluate economic benefits and costs, both the full costs and the incremental costs of energy-efficient refurbishment or of new buildings meeting MEPS requirements vs. conventional new building should be monitored for samples of buildings. The monitoring should also include design costs and policy implementation costs. For calculation of energy cost savings, avoided marginal costs of energy supply need to be estimated, both from the investor/user and the society’s perspective.
An evaluation system can be established by giving the task to a national authority, e.g. an energy agency. The agency should calculate energy savings each calendar year and do random sampling and surveys to verify data and side effects every two to three years.
For calculation and evaluation of energy savings, the formulas and methods developed by the European project EMEEES may be used. Economic benefits and costs can be evaluated using the California Standard Practice tests (CPUC 2001) and the data mentioned above under monitoring. In addition to the data directly monitored for the policy or measure, data from sample surveys on compliance, rebound effects, free-rider and spill-over effects may be needed for a better estimate of energy savings, and incremental costs of energy efficiency improvements and avoided marginal costs of energy supply will be needed for evaluating benefits and costs.
Sustainability aspects such as water, material and waste efficiency can be addressed through integration of corresponding requirements into building codes.
By ensuring a minimum level of energy efficiency, MEPS also create – at least to a certain extent – the co-benefits in terms of health, productivity, employment, and poverty alleviation that come along with energy-efficient buildings.
The following measures can be undertaken to overcome the barriers:
Timely and thorough policy planning can avoid most of these barriers through.
Advanced countries such as China, Denmark, Germany or Sweden have already achieved energy savings of 50 to 75 % in today’s new buildings as compared to conventional building practices of the past through their MEPS. The European Union has recently decided that all new buildings should be ‘nearly zero energy buildings’ from January 2021 (Energy Performance of Buildings Directive 2010/31/EU).
China, for instance, has achieved a calculated minus 50 to 65 % of energy consumption for new buildings vs. conventional building practice in the 1980s.
“In France, regular surveys show that successive thermal regulations led to a reduction in energy consumption per square metre by a factor 2 to 2.5.”
“In California, the California Energy Commission has commissioned some studies on occupant behaviour and energy use in new houses, and concluded that code requirements are generally being met during construction. The building energy efficiency levels in California are significantly higher than in other US states with similar climates but no mandatory energy standards. Building Standards alone were estimated to be responsible for energy savings equal to about 3 percent of total energy consumption in California in 2003” (all UNDP 2010, p.23).
“The cumulative energy savings achieved (through MEPS) for new dwellings, compared to dwellings built before the first oil crisis, is about 60% on average in the EU. The additional savings that are targeted with future revisions in the standards are also impressive, at 20-30%” (WEC 2008, p.43).
However, “Relatively few countries have carried out evaluations of their building codes. According to the few studies available, it seems that the actual energy performance of new buildings are below what could be expected from the building regulations. Such a situation can be explained by behavioural factors (such as higher heating temperatures, more rooms heated, or longer heating period over the year) and by a non-compliance with the building regulation” (WEC 2010, p. 58-59).
“Only a few countries have estimated the additional costs that each round of new building codes has caused. Nevertheless, from the few results available, the additional costs are limited to a few percentage points (of construction costs, remark by bigEE), if any at all” (WEC 2010, p. 58-59).
Policy costs are not negligible – adequate staffing is a must both for policy development and evaluation at the national level and compliance control at the local level. However, in comparison to large-scale information or even to financial incentive programmes, the programme costs for MEPS are much lower.
Most countries set the energy efficiency requirements for MEPS in accordance with least life-cycle costs (IEA 2008). As a consequence, energy cost savings will exceed or at least match incremental costs of energy efficiency improvement and there will be a positive net benefit.
For example, the European Directive on energy Performance of Buildings (EPBD, 2010) requires Member States to set minimum energy performance requirements with a view to achieving cost-optimal levels. The same is the case in the USA.
In addition to energy cost savings, many developing countries will benefit from being able to defer investment in power generation, and building energy efficiency creates particularly high net employment effects (cf. sources cited in our document “Why policy needs to assist building and appliances markets to become energy-efficient”).
For instance, the retrofitting of 50 million US buildings (40 percent of the current building stock) by 2020 would require $500 billion of private and public investment but would directly and indirectly generate approximately 625.000 sustained full-time jobs and save consumers USD 32 billion to 64 USD billion a year in energy costs, or USD 300 to USD 1.200 a year for individual families (CAP, 2009).
Regulations for Energy efficiency of building design and operation in new and refurbished buildings
Type: Minimum energy performance standards (MEPS)