The international think tank policy about digital and green transition link
The European Union has a clear understanding that climate change and environmental degradation are an existential threat to the region and the world. To overcome these challenges, the European Green Deal was accepted, which should transform the EU into a modern, resource-efficient, and competitive economy.
Green Deal sets up ambition targets:
- no net emissions of greenhouse gases by 2050
- economic growth decoupled from resource use
DIGITALEUROPE, a leading association representing digitally transforming industries in Europe, claims digital and climate action should be looked at together, rather than as separate policy areas because one cannot be achieved without the other.
The ways of CO2 emissions by the manufacturing industry reduction, one of the largest contributors emissions worldwide, have been discussed during a six-day GMIS2021 week under the theme ‘Rewiring Societies: Repurposing Digitalization for Prosperity’. Major summit message – twin digital and green transition of the manufacturing industry. Among the main outputs of this event held on the highest level, was the launch of the Green Chain Initiative & Platform, aimed at accelerating the global decarbonization of the manufacturing sector through the fourth industrial revolution technologies (4IR), and utilizing blockchain and crypto technologies.
Sustainable Development Goals and the indicators in improving energy efficiency
In 2015, the UN General Assembly adopted the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs), which include a dedicated and stand-alone goal on energy, SDG #7, calling to “ensure access to affordable, reliable, sustainable and modern energy for all”. In particular, the goal is to double, by 2030, the global rate of improvement in energy efficiency.
Global energy intensity, defined as the ratio of primary energy supply to GDP, is the indicator used to track progress on global energy efficiency. The original target was an annual reduction of the energy intensity of 2.6% until 2030 although the world has fallen short of this goal since it was announced, such that the required rate of energy intensity reduction rose to 2.7% after the improvement of only 1.7% in 2017.
The further slowdown in 2018, with a reduction in energy intensity of only 1.2% according to the International Energy Agency (IEA) analysis, means that from 2019 to 2030 global energy intensity must reduce by 2.9% annually to reach SDG 7.3. objective. Meeting this objective will require important steps up in the implementation and expansion of energy efficiency policies. In particular in the area of broad implementation of technological change and advances in energy management in the industrial and building sectors with the use of digital technology.
Digital connectivity helps lowering energy costs
According to the International Energy Agency (IEA), customers connected to a smart grid can help deliver lower electricity costs. Around the world, pilot projects in smart metering show that time‐differentiated pricing reduces peak demand by an average of 15%. With additional technology in the customer’s home or business, these effects can double. Such results show that more detailed and frequent information on customer electricity use, together with new service offerings, can yield significant efficiency improvements. The contributions of smart customers account for a considerable share of the overall benefits claimed for smart grids. In the United Kingdom, for example, the national smart meter roll‐out is expected to reduce domestic consumption by 3% and peak demand by another 5%, generating almost half of the estimated USD 22 billion in annual savings. Electricity providers estimate that demand response and energy efficiency benefits made possible by smart customers will constitute one‐third to one‐half of total smart grid benefits. Achieving these benefits, however, requires large investments in new metering, communications, and customer interface technology, together with policies and service offerings that create smart customers.
Smart-Renovation of old buildings to dramatically reduce energy consumption and improve comfort living in the EU
Today in the EU, the existing building stock represents the main challenge for more efficient energy use. On 9 July 2018, as part of the Clean Energy for All Europeans package, new rules for energy performance in buildings came into force (Directive (2018/844/EU, amending existing Directive 2010/31/EU). These provisions aim at making the buildings of the future greener and more comfortable, consuming less energy. Existing building stocks are responsible for approximately 40% of energy consumption and 36% of CO2 emissions in the EU. Currently, about 35% of the EU’s buildings are over 50 years old and almost 75% of the building stock is energy inefficient, while only 0.4-1.2% (depending on the country) of the building stock is renovated each year. Therefore, more renovation of existing buildings has the potential to lead to significant energy savings – potentially reducing the EU’s total energy consumption by 5-6% and lowering CO2 emissions by about 5%.
In addition, investments in energy efficiency can also stimulate the economy, in particular the construction industry, which generates about 9% of Europe’s GDP and directly accounts for 18 million direct jobs. The new rules support the mobilization of investments in renovations and it is expected that SMEs will particularly benefit from a boosted renovation market, as they contribute more than 70% of the value-added in the EU building sector.
The European Commission also has a strategy to optimize buildings’ and industries’ heating and cooling which accounts for 50% of the EU’s annual energy consumption. The document presents several interesting facts:
- Almost half of the buildings have boilers installed before 1992, with an efficiency rate of below 60%;
- 22% of the gas boilers installed, 34% of the direct electric heaters, 47% of the oil boilers, and 58% of the coal boilers are older than their technical lifetime.
The renovation of existing buildings could lead to lower energy consumption; however, the refurbishment rate is currently below 1%. Among actions in order to decrease energy leakage from buildings, maximize efficiency, and boost the share of renewables, EU Heating and Cooling Strategy points in the following important direction: Promote proven energy efficiency models for public schools and hospitals to provide authorities with practices on for example how to use energy service companies, energy performance, and public procurement contracts or self-consumption solutions in making these buildings more efficient, how to go about energy renovation and installing heating and cooling systems supplied by clean renewable energy sources.
The revised Energy Performance of Buildings Directive introduces a Smart Readiness Indicator (SRI) to reflect the level of services offered by a smart building. This indicator will give a framework to assess the smart readiness of buildings and building units to adapt operation to the needs of the occupant and the grid and to improve energy efficiency and overall performance. Intelligent and connected devices, smart sensors, and controllers, supported by the development of new business models for new energy services, will create new opportunities for energy consumers.
ICT tools and big data generated by smart meters, smart devices, and sensors help monitor and verify energy savings and flexibility and thus provide for appropriate economical and green remuneration of optimized consumption. A particular challenge for energy services of this kind is that while they aim to involve different services (e.g. system services) and benefits (e.g. comfort) towards increasing their viability, they should nevertheless result in real, measurable energy savings and performance improvements of the overall energy system. Smart ESCO with digital metering system enhance and refine successful energy performance contracting models and include pay-for-performance schemes that will trigger grow investments in energy efficiency measures (e.g. upgrading of building energy performance) and in smart building systems which are paid back by revenues coming from energy savings and remunerated flexibility. This increase in investment will lead to a significant reduction in the consumption of primary energy sources in the existing building stock.
According to European data, bringing the building’s heat consumption from 60 kWh/m2/year to the established standard for central Europe of 15-30 kWh/m2/year will require an increase in the budget of the building under construction by 5% -15%. According to some estimates Europe’s climate goals for 2030 can be achieved only with the proposed mobilization of investments of up to 200 billion euros per year only for construction materials and an increase in the volume of modernized buildings at 3% per year, not 1% as it is now.
Integration digital technology to climate change measures by EU policies, strategies, and planning
Target 13.2. of the SDG 13, envisages integrating climate change measures into national policies, strategies, and planning. In “PROGRESS OF GOAL 13 IN 2019” there is noted that with rising greenhouse gas emissions, climate change is occurring at rates much faster than anticipated and its effects are clearly felt worldwide. While there are positive steps in terms of the climate finance flows and the development of nationally determined contributions, far more ambitious plans and accelerated action are needed on mitigation and adaptation. Access to finance and strengthened capacities need to be scaled up at a much faster rate, particularly for least developed countries and small island developing States.
The European Parliament announced its intention to reduce greenhouse gas emissions in the heating/cooling sector by 80% -95% by 2050 and set key indicators to reduce environmental impact and create an efficient and low-carbon economy by 2050 under the Paris Agreements climate, where already in 2030 a two-fold reduction in greenhouse gas emissions is expected.
So far, the EU makes the following steps towards achieving these goals:
- Implementation of The Energy Efficiency Directive, the Energy Performance of Buildings Directive, and the Smart Financing for Smart Buildings Initiative;
- Developing a toolbox of measures to facilitate renovation in multi-apartment buildings;
- Promoting proven energy efficiency models for publicly owned educational buildings and hospitals;
Also, the environmental effect from the use of electronic document circulation (paperless) and teleconferencing (remote work) can allow to avoid some tens of thousands of tons of CO2 per year per country.
Twin digital and green transition enhance the adoption of ICT and digital connectivity
Target 17.8 of the SDG 17, envisages to fully operationalize the technology bank and science, technology, and innovation capacity-building mechanism for least developed countries by 2017 and enhance the use of enabling technology, in particular information and communications technology. It has an indicator – the proportion of individuals using the Internet. Taking into account the big share of existing buildings and the high growth smart building market in the EU a number of individuals who use enabling digital services smart energy metering may reach tens of millions per year.
Finally, it should be noted that UNDP sees Digitalization among the tools for achieving Environment & Energy Sustainable Development Goals (see illustration below).
Conclusion:
Twin digital and green transition provide a significant impact on the achievement of the SDGs. Green&Digital – together larger!
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