How to make buildings of local authorities climate neutral (by 2050 at the latest)?
Most Flemish municipalities have signed the Covenant of Mayors 2030. These municipalities hereby agree to take actions to reach the EU objective to emit 40% less greenhouse gases by 2030. Meanwhile, the Covenant of Mayors 2050 has also been endorsed by many municipalities, which raises the bar even higher. Part of the actions is the accelerated improvement of the energy efficiency of their own real estate portfolio, which should eventually be climate-neutral by 2050 (at the latest).
At the start of the FALCO project, the buildings owned by the provinces of West Flanders and Flemish Brabant were used as case studies. Both provinces have the ambition to make their real estate portfolio climate neutral by 2030 and 2040 respectively. An initial analysis indicated the need for a strategic real estate vision and the importance of good data to reach well-informed decisions.
Which societal services does a local government want to provide in the future?
What are trends that will impact future real estate demand?
What are the buildings currently used for?
What services does a local government wish to offer in the coming years and decades, and what buildings are needed for this?
Does is bring added value to cluster several functions on one spot?
The answers to these questions are used to get a better idea of the desired future building portfolio. In the next step, this ideal picture is compared to the current heritage. On this basis, a transitory pathway is drafted both for the entire patrimony and for individual sites and buildings. This indicates how much, when (between now and 2050) and in which buildings investments must be made.
Parallel to this process, work was conducted on developing concrete financing solutions. One conclusion is that the initial financing of investments is preferably backed by own revenues and/or bank loans, hence not through 3rd party financing. The robust financial status of most local governments makes this feasible. In line with this boundary condition, the focus has therefore shifted to looking for financing solutions that maximise the return on the initial investment. This can be done by realising (energy) savings but also by generating income from the patrimony itself. This keeps the total cost of the entire transition process as low as possible for the taxpayer.
An important financing solution that has been developed takes into account the desire of most local politicians to strive for budget neutrality whenever possible. Energy performance contracts (EPC) apply this principle by using energy cost savings to repay investments. Whereas classic energy performance contracts lead to an average reduction in energy consumption of about 30%, a refinement of this concept can increase this target to about 40%. This innovative EPC approach (Building Performance Contracting, BPC), based on the 'residual value' concept, was developed by Factor4 and is an important contribution to effectively implementing the climate ambitions of local governments in an affordable way.
For more information and visuals, please click for the full article here.
