by Nada Welker | Feb 5, 2024 | Electrification, Future Trends, Market development & Trends, strategy in change, Technologies for new markets
The conference on “Energy transition in Viticulture – New Concepts for Sustainability” at the Weincampus Neustadt was a great success. The event took place on January 31, 2024, in the auditorium of the Service Center for Rural Areas (DLR) Rheinpfalz as an interactive format, attracting a diverse group of wine experts, vintners, and enthusiasts.
Participants were invited to delve into the challenges posed by the energy transition for the German wine industry. The focus was on the issues and opportunities for small and medium-sized wine businesses, particularly in terms of potential savings and the generation and storage of renewable energy. Commencing at 4:30 PM, the event provided an in-person experience at the DLR Rheinpfalz auditorium, with the option for virtual participation via the livestream at https://schlagabtausch.ef-sw.de/.
Energy transition in Viticulture – Panel Participants
The panel discussion brought together renowned experts from the wine industry to share their perspectives. Discussion participants included Dr. Michael Müller, Managing Partner of Magility GmbH from Wendlingen am Neckar, along with Jochen Schmitt from Weingut Egon Schmitt in Bad Dürkheim, Matthias Wolf, Managing Director of Weingut Schloss Ortenberg, Hans-Christoph Stolleis, Owner of Weingut Stolleis in Neustadt an der Weinstraße, Saskia Wörthwein, Managing Director of Weinmanufaktur in Untertürkheim, and Moritz Prinz zur Lippe, Apprentice at Weingut Ökonomierat Rebholz in Siebeldingen.
A Sign of Sustainability in Wine Production
The discussion focused on ways to make wine production more sustainable, shedding light on the role of renewable energy in viticulture. Participants learned how small and medium-sized wine businesses can achieve savings while contributing to the energy transition. The conference was free of charge, allowing for spontaneous participation, fostering a broad engagement and ensuring diverse perspectives were heard.
In conclusion, the event served as a successful forum for exchanging ideas and information about the energy transition in viticulture. Weincampus Neustadt thereby set an important example for more sustainability in wine production and promoted dialogue between industry experts and practitioners.
The Multidimensionality of Viticulture: A Look at the Levels of Success
Viticulture, a complex and multifaceted industry, is influenced by various levels ranging from global trends to specific growing conditions. Dr. Michael Müller provided a closer look at these levels in his presentation, vividly summarizing them for the participants.
Level 1: The World – Global Trends and Politics
At the highest level, global trends and political decisions on a global scale come into play. Climate change and globalization are examples of factors that can influence viticulture worldwide, requiring continuous adaptation by the industry.
Level 2: Region – Climatic Conditions and Legislation
The second level is the region, where climatic conditions play a crucial role. In Germany, wine regions like Pfalz, Mosel, Rheingau, and Baden are of great importance. Here, laws, regulations, infrastructure, and cultural factors influence viticulture. The German Wine Law is an example of a norm with significant influence on the regions.
Level 3: Soil, Terroir, Topography – Influence on Taste
On the third level, soil, terroir, and topography come into play. These complex factors mutually influence each other and significantly shape the taste of the wine. Each wine-growing region has its own peculiarities that manifest on this level.
Level 4: Vine, Vineyard – Grape Variety, Cultivation Method, Care
The fourth level encompasses the vine and the vineyard. Here, the choice of grape variety, cultivation method, and care are crucial. Different grape varieties are suitable for various cultivation methods, resulting in a diverse wine landscape.
Level 5: Harvest, Vinification – Technique and Vinification
The fifth level includes the harvest and vinification. The choice of harvest technique, vinification, and aging significantly influence the quality of the wine.
Level 6: Brand, Marketing, and Sales – Identity and Distribution
On the sixth level, brand, marketing, and sales take center stage. Here, brand identity, marketing strategy, distribution channels, and sales play a decisive role in market success.
Overall, this hierarchical approach illustrates that viticulture is a multidimensional industry, requiring careful considerations and adjustments at each level to ensure quality and competitiveness. A profound understanding of each level enables vintners to operate successfully in this challenging environment.
Energy transition in Viticulture – Summary of Participant Voices
- Need for Savings: There was unanimous agreement among participants that measures to save resources and energy in viticulture are inevitable.
- Reflection and Implementation Speed: It was emphasized that while much thought is given, faster implementation and more speed in deploying solutions are necessary.
- Future Investment: Participants saw adapting to sustainable practices as an investment in the future.
- Start-ups’ Need: There was a desire for more support from start-ups that can develop innovative solutions for winemakers.
- Focus on Wine Production: Participants stressed the importance of focusing on wine production and leaving technological solutions to others.
- Knowledge Source: The question of acquiring know-how was raised, emphasizing the need for more best-practice exchange and forums.
- Experimentation and Trying Out: The necessity to experiment with new approaches and technologies was underscored.
- Government Assistance: Politics were urged to assist in challenges such as slow approval processes, for example, for cables in the ground.
- Grid Adjustments: Criticism was voiced about mismatched grid structures, with a demand for improvements.
- Priority for PV Rooftops: Prioritizing photovoltaic rooftops was suggested.
- Profit Assurance for Winemakers: It was emphasized that sustainability measures should also serve to secure profit for winemakers, enabling the implementation of new concepts.
- Action over Words: There were multiple appeals not only to talk but to actively take measures. Exchange and collaboration were highlighted as key factors.
In conclusion, gratitude was expressed for insights from a different perspective that enriched the discussion.
Energy transition in Viticulture – Magility Summary
The digitalization and electrification in viticulture shape a sustainable future. From harvest to marketing, innovative technologies enable efficiency gains, quality improvements, and active support for the energy transition. Winemaking enterprises pursuing intelligent solutions are not only embracing eco-friendly practices but positioning themselves as pioneers in sustainable viticulture. A holistic examination across all levels – from harvest to marketing – creates a path to a future-oriented and environmentally conscious wine cultivation. In the coming days, our blog will delve into the different levels of action in viticulture. Look
by Nada Welker | Jun 7, 2023 | ESG, strategy in change
Path to climate neutrality
Many efforts are needed on the road to carbon neutrality. Companies are under increasing pressure to address environmental, social and governance (ESG) issues and define sustainability targets. Read everything you need to know about Carbon Crediting in our recent blog article.
A decarbonisation strategy for climate protection
Beyond their ethical implications, ESG measures and, as a consequence, good ESG ratings have become a crucial competitive factor for companies.
With comprehensive sustainability reporting set to become mandatory very soon, companies are recognising the relevance of managing their environmental impact, particularly in relation to carbon emissions. According to experts, in order to achieve the 1.5-degree target for CO2 emissions proclaimed in Paris in 2015, global greenhouse gas emissions would have to be reduced by 50 per cent of current levels by 2030 and reduced to net zero by 2050.
Source: McKinsey, 2021
The harmful effects of these emissions on the global climate have led companies and organisations to re-evaluate their operations, adapt to greener practices and develop comprehensive strategies to reduce their carbon footprint, such as building renewable energy facilities. In such a decarbonisation strategy, one ideally follows the principle of Avoid – Reduce – Remove – Offset.
Source: Magility, 2022
However, there are also emissions that are difficult to reduce or even completely avoid, especially in manufacturing companies. For these companies, it is compensation instead of reduction. This is where the so-called carbon credits come into play.
Carbon Credits and Carbon Allowances
Carbon credits are used by companies to offset emissions that they cannot avoid. This so-called Voluntary Carbon Market (VCM), i.e. voluntary implementation, contrasts with Regulated Emission Trading Systems (ETS), which are used by various countries to encourage companies to reduce emissions. In the ETS, the amount of CO2 emissions allowed is limited. Companies that emit fewer emissions than allowed can sell these as so-called carbon allowances – but if they emit more than allowed, they must purchase corresponding allowances.
By purchasing carbon credits and thus financing certified climate protection projects, companies, governments, but also individuals can reduce, remove or offset their emissions. One carbon credit corresponds to the removal of one metric tonne of CO2.
Since 2005, the European compliance market has included CO2 emissions from industry, energy and aviation, the sectors with the highest current emissions in the EU. It is managed according to the “cap and trade” principle, which reduces the amount of carbon allowances available each year, thus increasing prices and creating incentives to reduce. In 2022, the total number of allowances in circulation (TNAC) was over 1.1 million, generating €38.8 billion in sales. The number of annual allowances is continuously being reduced in order to achieve further price increases.
The VCM which started in 1996 with the first so-called REDD projects (Reducing Emissions from Deforestation and Forest Destruction) has rapidly developed into a million-dollar business that could potentially be worth almost 10-40 billion dollars by 2030.
Source: Shell and BCG, 2022
Carbon Crediting Ecosystem
Currently, projects to offset CO2 are carried out by independent private project developers. Both the projects themselves and the tonnes of CO2 saved as a result are verified by external auditors. These auditors apply various standards, such as the Gold Standard or the Verra Verified Carbon Standard, to quantify and verify the savings potential of the projects. After verification, the corresponding number of credits is registered in the so-called carbon registries of the respective standards. Buyers can then purchase the credits directly from the project developers, via the registries or from other traders.
Source: Magility, 2022
What are the disadvantages of carbon crediting so far?
Since the market for carbon credits and the associated projects is not yet very strongly regulated, there is a danger that companies will only engage in emissions reduction for the sake of appearances, invest in projects that are not environmentally compatible or simply engage in greenwashing:
- Compensation measures, such as reforestation of the rainforest, are relatively short-term measures – which is exactly “only” over the lifetime of a tree. Nevertheless, in most cases such measures also create other benefits for the environment.
- In some cases, (re)afforestation does not take into account the biodiversity of the surrounding area, but focuses only on factors such as rapid tree growth. This in turn promotes the spread of monocultures.
- The prices for carbon credits were still very volatile in the past. This creates the risk that investments for future projects are set too low.
- Some companies could simply buy carbon credits for a clear conscience – and at the same time do nothing to reduce their emissions.
- In the context of impact investing, i.e. investing in sustainable projects, “additionality” is key. This means, if a project or an investment creates a reduction in emissions, this must be in addition to the emission reductions that would have been achieved even without the implementation of the project. However, assumptions about what emission reductions would have been achieved even without a specific project are often difficult, if not impossible. For example, would the solar plants in a rural area of India have been built only because of the investment through carbon credits or would they have been built anyway? Would a forest in Colombia have been reforested even without carbon crediting financing? Although the registries are trying to ensure additionality, it will probably be a while before there is real clarity on this.
What does the future hold for carbon crediting?
Under Article 6, the Paris Climate Agreement allows the carbon crediting system to offset emissions, as well as trading carbon allowances. The current Clean Development Mechanism (CDM) will be replaced by a new registration option for projects. It currently remains uncertain whether and to what extent this will affect the VCM. Although standardisation is still under development, carbon credits will undoubtedly be an important factor in reducing emissions and a considerable currency. However, to become completely carbon neutral, more than just offsetting is needed, but an intelligent and holistic decarbonisation strategy.
Article 6.4 was recently added to the Paris Agreement at COP29 to introduce a new mechanism that creates a more transparent and efficient framework for climate action and revolutionises carbon credits. You can read everything about the new carbon credits here.
At magility, we consider this decarbonisation strategy a fundamental part of our ESG management system. We help you to implement your individual strategy into your company.
When does your sustainable future start? Contact us for more information!
by Nada Welker | May 2, 2023 | Alternative Drives, Automotive Industry, Future Trends, New Mobility, Smart Logistics
Sustainable mobility is one of the automotive megatrends of 2023, if not of the current decade. Environmental protection has never been in the public and political spotlight as much as it is now: During the last World Environment Day, the UN announced its plans for stricter CO2 reduction regulations; many countries, including China and the US, present their plans to promote electric vehicles. In October 2022, the EU Parliament approved a reduction in CO2 emissions from new vehicles of 55% for passenger cars and 50% for light commercial vehicles such as vans and vans by 2030, compared to 2021. By 2035, this reduction must be 100% – meaning new passenger cars and vans must be emission-free. For trucks weighing more than 16 tons, the planned reduction is 30% from 2030; however, it is expected that even stricter regulations will follow.
As a contribution to nature conservation, as a competitive advantage, and for a positive ESG rating, many companies are taking steps to comply with sustainability reporting regulations and CO2 reduction.
For the automotive industry with its car and truck manufacturers and other stakeholders, the new EU targets primarily mean major changes – but also a great opportunity for innovation and radical, sustainable transformation of their own products, services and business processes. German passenger car manufacturers are meeting the challenge of sustainable mobility mainly by further developing the electric motor on the basis of battery and fuel cell technology: Mercedes Benz wants to stop launching vehicles with combustion engines on the market as early as 2030, Opel even as early as 2028.
The example of German IT service provider Bridging IT GmbH shows that the implementation of regulations and the use of sustainable mobility is already possible in the company’s own fleet. As early as 2011, the company began replacing individual combustion vehicles with e-vehicles. By 2015, the company had the largest e-fleet in Germany to date – and it continues to grow.
So far so good. But what about freight fleets? After all, the big hulks on two to four axles have enormous CO2 emissions – with 141.3 million tons of CO2 emissions in 2020, Germany is clearly the EU leader in road transport. And that is anything but sustainable.
Carbon dioxide emissions from road transportation in the European Union in 2020 (Source: https://www.statista.com/statistics/1236750/road-transportation-greenhouse-gas-emissions-eu/)
Truck Fleet to Zero – how a logistics company successfully implements sustainable mobility.
First published at the 44th International Vienna Motor Symposium from 26.4.-28.4.2023 in Vienna in detailed elaboration.
The company Mosolf Transport Solutions GmbH from Kirchheim/Teck shows that it can also be done differently, which is almost climate-neutral. The leading technology and logistics service provider for the automotive industry wants to convert part of its fleet to e-trucks in a comprehensive transformation project. Managing Director Egon Christ now presented the results of the first project phase in close cooperation with Magility GmbH at the 44th International Vienna Motor Symposium.
Impressions from the symposium
Sustainable mobility poses major challenges for logistics companies
The switch to new drive technologies poses countless major challenges: Not only must it be possible quickly and easily – compared to existing diesel technology, a new technology must above all be comparably robust, durable and reliable. Under no circumstances must there be risks in the operational area or disadvantages in competition or costs. In the case of e-mobility, there are additional factors such as the development of an operational and the use of public charging infrastructure, the question of government subsidy programs for the development of these structures and the renewal of the fleet. Operationally, profitability assessments, risk understanding and risk management in the TCO calculation come into play in the technical transformation during implementation. At the same time, the complexity of the change is also influenced by external factors, such as changing vehicle acquisition costs, energy costs that are currently difficult to calculate, and also highly volatile factors such as tolls, tax laws, GHG regulations, and subsidy guidelines.
How transformation can succeed
The design-to-quality model
Due to the complexity of the challenges, Mosolf relied on a structured transformation path that reliably maps, evaluates and tracks the economic and technical challenges. It used a design-to-quality model that evaluates different technologies and energy options and boils it down to the most important parameters.
Overall assessment model based on a “design to quality” design (Source: Mosolf/Magility GmbH, 2023)
In order to calculate the total cost of ownership, a total cost model was developed for the acquisition costs and the operating costs. Of particular relevance here are also: the expenses for the charging infrastructure, subsidy programs, deployment profiles, charging, maintenance and wear and tear, as well as taxes, insurance and toll costs.
The results of the overall model revealed overlaps between the technology options over the operating life of the vehicles, which were then used to create a decision matrix. The most important parameter in the cost model for vehicle acquisition costs was the cost development curve for battery technologies – this has the greatest impact on cost reduction. Economies of scale also massively reduce the costs for electric drives and charging technologies.
Cost development curve for battery systems from 2009 to 2030 (Source: Mosolf/Magility GmbH, 2023)
It was clear to see that a clear direction of cost development for batteries has been emerging since 2009. This analysis was based on more than 20 sources and studies.
Further insights were gained, for example, from a dynamic cost calculation. This involved forecasting technologies (diesel, fuel cell and battery electric vehicles) and their potential for the future as well, using various CADRs and CAGRs:
- different ranges
- different technologies and architectures
- available public funding programs
- emission requirements
Insights into sustainable mobility for logistics companies
Overall, many valuable insights into a transformation process towards the use of battery-powered vehicles were gained in project phase 1:
- Dynamic cost considerations allow procurement scenarios to be planned professionally and holistically.
- Decision matrices help management to optimize the conversion of their fleets along typical usage periods.
- New battery technologies and vehicle architectures will enable further cost reductions.
- Significant reductions in charging times can already be achieved with MCS (megawatt charging system) charging technology. Charging technology for trucks weighing more than 16 tons will continue to develop dynamically.
- In view of the not inconsiderable challenges, it was essential to support the decision-making process with professional opportunity and risk management, which can provide information about the risks and opportunities of the project at an early stage.
Traditional decision-making processes rarely work well for this type of transformation – modern decision-making processes are more far-reaching and complex, as a wider range of technologies is available and opportunities, potentials and risks have to be assessed. When deciding for or against electric drives and sustainable mobility, companies must also weigh whether to build their own infrastructure or use external options. Government subsidies and the responsibility for entrepreneurial action naturally also play a major role.
The new decision-making process for the transformation to electromobility involves mapping future cost trends using digital twins that anticipate risks and fluctuations in energy costs. Investment costs are strongly influenced by use cases that determine when cost parity is achieved. The level of ambition for transformation can be slow, medium or fast.
Sustainable truck mobility is already a reality today
One thing is certain: business models are now being developed in the direction of sustainability and future viability. At Mosolf, the first step has been taken: The first electric trucks have been procured and the charging infrastructure has been set up. Test operations have begun and the next wave of procurement is being planned.
Would you also like to take the path to sustainable mobility? Our experts will be happy to support you in your transformation project!
by Nada Welker | Aug 11, 2022 | ESG, Future Trends, Market development & Trends, strategy in change
How well is your company doing? No, the question is not about sales figures, but about orientation to and implementation of ESG criteria – Environmental, Social and Governance. A company is rated by the relevant rating agencies on the basis of its compliance with various criteria in these areas. A positive ESG rating will be nothing less than essential for a company’s survival on the market in the near future.
ESG – Three letters change the corporate world
What exactly is behind the three letters? Roughly speaking, environmental protection is, among other things, the avoidance of greenhouse gas emissions and energy efficiency. The basis for this is the so-called Green Deal of the European Commission. The social aspects relate, for example, to demographic change, protection against unemployment, preservation of health, acceptance and tolerance of diversity, and commitment to social issues. Sustainable corporate governance is based on ethical values and ensures the implementation of appropriate management and control processes. ESG thus has implications for entire global supply chains.
ESG rating – rating with changed parameters
Who is responsible for this evaluation? Rating agencies, whose list is currently headed by MSCI (Morgan Stanley Capital International) and Sustainalytics. With the acquisition of Institutional Shareholder Services (ISS) two years ago, Deutsche Börse is also among the top 5 best-known ESG rating agencies. Big players for conventional rating, such as Moody’s, still primarily focus on economic parameters such as revenue, profitability, liquidity and risk. Evaluation by means of ESG rating at Moody’s is handled by a specially founded offshoot called Vigeo Eiris. Other big names such as the U.S. agency Fitch are trying their hand at being all-rounders and have added ESG criteria to their primarily economic parameters. Other agencies include FTSE Russell, S&P Global, CDP, Dow Jones Sustainability Indices (DJSI) and the world’s largest provider of sustainability ratings, EcoVadis.
Transparency and attractiveness for investors through ESG rating
But why all this effort? Who needs such a thing? It is investors such as asset managers and social partners, as well as non-governmental organizations, who are increasingly demanding more detailed information from companies about the impact of their activities on people and the environment. However, the standards of the individual agencies for ESG rating as well as the respective certification are not uniform and therefore rather confusing. This also makes it difficult to compare companies. Due to the lack of uniform standards and frameworks, there is a lack of clarity for companies, which therefore often do not know precisely what information they actually have to provide. It is best to pick the agency whose ESG rating offering best fits the company profile. And smaller companies should make sure that the questionnaire allows for easy customization.
Even small companies are not spared
The ESG rating currently primarily affects large companies on the investment market with an average of more than 500 employees, a balance sheet total greater than 20 million euros or net sales of more than 40 million euros in a fiscal year, as well as listed companies. Listed micro-enterprises are excluded. However, no one is likely to be spared in the future, which is why it is best for smaller companies to address this issue now. For example, Asset Management at Landesbank Baden-Württemberg (German only) refers to independent studies that show the connection between ESG criteria, a possible reduction of risks, and the success and further development of a company. The German Economic Institute (Institut der deutschen Wirtschaft, IW) makes it clear that under the heading of corporate social responsibility (CSR) alone, additional demands are being made by politicians, despite the voluntary commitment that has long been made in the business world. For example, the German Federal Ministry of Labor and Social Affairs has announced that it will hold the business community more accountable than before in connection with CSR. And at the EU level, there is talk of mandatory standards and regulated social and environmental reporting.
Green Deal with big goals
With the Green Deal, the EU has set itself big goals: By 2050, it wants to be modern, resource-efficient and competitive. There are to be no more net greenhouse gas emissions by then. In the future, the protection of nature is to protect people from environmental risks and their effects. The social market economy is to be entirely at the service of people and guarantee stability, jobs, growth and investment. This is also the context of the Principles for Responsible Investment (PRI) investor initiative launched in 2006 in partnership with the UN Environment Programme (UNEP) Finance Initiative and the UN Global Compact. The aim of the initiative is to develop principles for responsible securities management and to take into account the increasing importance of environmental, social and corporate governance issues.
EU Commission seeks clarity
To this end, the EU Commission specifically adopted a directive for large public interest entities on the disclosure of non-financial information back in 2014, but stakeholders have struggled with its implementation In turn, Brussels followed up with non-binding guidelines on corporate reporting in 2017 and also provided guidelines on climate-related reporting in 2019 without, however, achieving any qualitative improvement in the reports submitted by companies. This is now to be remedied by a proposal from the Commission in April 2021 to amend the previous directive.
Magility ESG Management, Sustainability and ESG Rating
At magility, we define a sustainable business ecosystem as a cross-industry, interconnected value network whose members collectively contribute to the creation and delivery of products and services and sustainable innovation based on the Sustainable Development Goals (SDGs). We support our customers in their sustainability transformation, e.g. by implementing the comprehensive Magility ESG Management System. In doing so, we help companies achieve sustainable and responsible corporate governance with sustainability reporting and ESG ratings.
At magility, we’re here to help. Contact us now – we’ll be happy to answer your questions. Follow us for more news also on LinkedIn. We look forward to hearing from you!
by Julia Riemer | Dec 20, 2021 | Market development & Trends, strategy in change
Energy efficiency standards in buildings – And why sustainable development is important right now
Since the beginning of the Industrial Revolution in the second half of the 18th century, economic growth processes have repeatedly been realized at the expense of the environment. The overall continuous growth of the earth’s population also induces the growth of the economy, which in turn drives the demand for resources. This increase in demand is opposed by planet Earth with its limited available resources. If demand continues to grow unchecked, these will not be sufficient to feed a growing population in the long term. According to a study by Madhumitha Jaganmohan, the world’s population is estimated to reach eleven billion by 2100. Given the increasing depletion of the world’s resources, it is crucial to use them wisely. Find out what this has to do with energy efficiency standards in buildings in this article!
The tool of sustainability helps us adapt strategies in a modern world to boost the economy without depleting natural resources. In September 2015, under the auspices of the United Nations, the 2030 Agenda for Sustainable Development and its 17 sustainable goals – the Sustainable Development Goals (SDGs) – were adopted by all member states. The goals address the global challenges humanity is facing in all areas of life and aim to achieve a sustainable future for all. Various actors are actively contributing to the achievement of the SDGs; one example is impact investing.
The United Nations Framework Conference on Climate Change (UNFCC) hosts the Conference of the Parties (COP) each year. The goal of the annual conference, in addition to promoting sustainable resource-conserving economic activity, is to use a holistic approach to combat climate change, stabilize greenhouse gas concentrations in the atmosphere, and reach an agreement on the time needed to achieve the goals.
What measures are being used to combat climate change?
Global energy-related CO2 emissions totaled approximately 36.44 billion metric tons in 2019, a significant increase over the pre-industrial era. However, forecasts for 2020 show a significant decrease in emissions due to the impact of COVID-19. The Asia-Pacific region was the largest producer of CO2 emissions in 2019. To reduce carbon dioxide production, several countries have begun issuing tradable green certificates. Carbon pricing is considered one of the most effective ways to encourage companies to reduce emissions and promote more sustainable production. In addition, increasing energy production from renewable energy sources is seen as another way to reduce carbon emissions.
Reducing energy consumption and curbing energy waste are of increasing importance to the EU. In 2007, EU policymakers set a target to reduce the Union’s annual energy consumption by 20% by 2020. In 2018, the Clean Energy for All Europeans package set a new target to reduce energy consumption by at least 32.5% by 2030. Energy efficiency measures are increasingly recognized as a means not only to achieve sustainable energy supply, reduce greenhouse gas emissions, improve security of supply and reduce the cost of energy imports, but also to improve EU competitiveness. From a strategic point of view, energy efficiency is therefore of particular importance for the Energy Union and the EU promotes the principle of “energy efficiency first”. Currently, the future strategic framework for the period after 2030 is being discussed.
Energy efficiency standards in public buildings
Currently, the Commission is asking Member States to set national indicative targets for reducing energy consumption, introducing strengthened automatic mechanisms to close the gaps, and doubling the obligation for Member States to achieve new annual energy savings of 1.5% of final energy consumption between 2024 and 2030. It also introduces exemplary requirements for public buildings, such as the target to reduce energy consumption in the public sector by 1.7% annually and the target to renovate at least 3% of the total area of public administration buildings. It also proposes to reduce energy poverty by giving priority to vulnerable customers, and to introduce audit obligations and technical competence requirements, especially for large energy consumers. Energy poverty in particular could be a major problem in the future if not countered: The expected price explosion for electricity and gas may become an existential problem for millions of EU citizens.
The most important standards for energy efficiency
The German government uses two instruments to promote energy-efficient construction: Grants via the KfW Bank or the Federal Office of Economics and Export Control (BAFA) and the requirements of the Building Energy Act (GEG). These two instruments result in the most important standards for energy efficiency:
KfW Efficiency House or Energy Efficiency House
The term “Efficient House” is a quality mark developed by the Deutsche Energie-Agentur GmbH (dena) together with the Federal Ministry of Transport, Building and Urban Affairs (BMVBS) and the Kreditanstalt für Wiederaufbau (KfW). KfW uses this quality mark as part of its “Energy-efficient construction” and “Energy-efficient refurbishment” funding programs. A KfW Efficiency House is distinguished between different categories (e.g. KfW 100, KfW 85, KfW 70, etc.). These indicate the maximum percentage value of the primary energy demand of the reference building calculated in the GEG. A KfW 100 house thus corresponds to a GEG new building. A KfW-85 house may have a maximum of 85% of the primary energy requirement of the reference building. With the introduction of federal funding for efficiency houses, the standards will remain largely unchanged. However, the designation will then only be Effizienzhaus.
Zero energy house
This building standard refers to the annual energy balance of the building. In the annual balance, a zero-energy building must compensate for external energy purchases by generating its own energy (e.g., through photovoltaics or combined heat and power). The less heating and household electricity the household requires, the less electricity has to be generated by technical systems.
Energy Plus House
Over the course of a year, an energy-plus house generates more energy than it consumes. In addition to the heat demand for heating and hot water, household electricity is also taken into account. To meet these high requirements, highly efficient household appliances are needed in addition to a high-quality building envelope and efficient systems engineering. Theoretically, however, no electricity storage is required: the electricity grid is considered a seasonal “store” in both the Energy Plus House and the Zero Energy House. However, in order to increase independence and ensure climate-friendly decreasing energy costs, the acquisition of such a storage unit is very often worthwhile today. The Efficiency House Plus is similar to the Energy Plus House, with the difference that in the former a fixed household current is specified.
Passive house
Passive houses cover most of their heating needs from passive energy sources such as solar radiation and internal heat sources (waste heat from household appliances and people). They are heavily insulated and very tightly built, have large, south-facing window areas and require a mechanical ventilation system with heat recovery. According to the definition, the low heating requirement of max. 15 kWh per square meter and year can be covered by the hygienic air exchange (air heating) that is necessary anyway. Nevertheless, conventional heat generators and heat transfer systems such as radiators or underfloor heating can also be used as long as the prescribed renewable primary energy demand of 60 kWh/m² is not exceeded. Household electricity is also taken into account in the evaluation of the primary energy demand.
Energy self-sufficient house
In contrast to zero-energy and energy-plus houses, energy-autonomous houses achieve a high degree of independence not only in balance sheet terms: they actually cover a large part of their energy requirements themselves. This is made possible by seasonal heat and power storage systems that make surplus energy from the summer months available into the winter. Energy-saving envelope surfaces, large storage masses in the building and energy-efficient household appliances are also important.
Low energy house
The low-energy house is a catchy term that is neither protected by law nor defined by standards and is used by solid and prefabricated house manufacturers primarily for advertising purposes.
The energy-saving 3-liter house
3-liter houses are buildings that require only about 3 liters of heating oil per square meter per year. This corresponds to a final energy demand of around 30 kWh/m² and year.
GEG building/reference building
According to the current version of the Building Energy Act (GEG), a building-specific primary energy requirement and an average U-value must not be exceeded in new buildings and energy-related renovations. The reference building is one way of calculating these limit values.
Funding landscape of energy efficient buildings
The promotion of energy-efficient buildings is a central point in the federal government’s energy concept. As part of the decisions of the 2019 Climate Cabinet and the Federal Climate Protection Act (KSG), the conditions were made more attractive and the subsidies were increased. This has triggered strong momentum, which has been reflected in the number of applications for the funding programs in recent years. Further transformations are on the horizon with the gradual introduction of the federal subsidy for efficient buildings (BEG). This will combine and expand existing subsidy programs such as the CO2 Building Renovation Program and the Market Incentive Program, so that in future only one application per building project will be necessary. The aim of the BEG is to contribute to reducing greenhouse gas emissions in the building sector to 70 million metric tons of CO2 equivalents in 2030, whereby the subsidy is only one component of the greenhouse gas reduction and further tightening by EU requirements is also conceivable.
It therefore remains exciting to what extent energy standards will continue to develop in the future. We at magility will keep an eye on further developments for you.
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