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Net Zero Buildings: Energy transition towards Net-Zero

The term ‘energy transition’ is taken as an approach to convert the global energy sector from fossil fuels to carbon-free energy sources by the second half of this century. The focus is on the need to reduce energy-related CO2 emissions in order to limit the impact of climate change.

As part of the goal to reach net zero, building must use more sustainable sources of energy. Decarbonizing the energy sector requires urgent action at the global level, and while the global energy transition is underway, there is a growing need to reduce carbon emissions and mitigate the impacts of climate change in all industries and sectors. Renewable energy and energy efficiency measures have the potential to achieve 90% of the required CO2 reductions, therefore it is easy to see why further action is required in the race towards carbon neutrality.

Overview of Energy in the Building Sector

Among the sectors, buildings will experience the steepest reductions in carbon emissions in a ‘faster transition scenario’. According to the “IEA Report on Perspective of Clean Energy Transition, 2019” the emissions from fuels burned directly in buildings are expected to drop by almost 75% by 2050. This dramatic reduction is achieved by almost completely eliminating the use of coal in buildings. Compared to today, oil consumption will be reduced by 85% and total demand for natural gas will be reduced by 50%.

The importance of net zero buildings becomes even clearer when you combine direct emissions with indirect CO2 emissions from electricity use. The share of electricity in building energy consumption is expected to increase from 33% in 2017 to almost 55% in 2050. However, due to ongoing significant efficiencyd3 improvements, electricity demand in 2050 could be approximately 300 million tons of oil equivalent (Mtoe) lower than it is today. Coupled with clean electricity, this means that building-related emissions could drop by about 6% annually, reaching 1.2 GtCO2 by 2050. This is one eighth of the current level and a positive ambition for the future.

Technology Footprint of the Building Sector

When it comes to energy, the building sector includes a wide variety of energy consuming and producing technologies, many of which play an important role in the clean energy transition. However, presently only lighting is on track to reach clean energy transition goals. Building envelopes and heaters, which account for half of the world’s building energy use, are yet to be on track with meeting the necessary reductions. Although cooling appliances have shown some improvement, significant technological and policy efforts are needed to accelerate progress.

In contrast, the building envelope is stubbornly lagging behind, with two-thirds of the world’s countries not having mandatory building energy regulations as of 2017. Advances in heating technology used in buildings have also lagged, with fossil fuel systems continuing to outperform more efficient means of heating such as renewable options such as heat pumps and solar thermal systems. To get the transition to clean energy on track, we need to triple the share of heat pumps, renewable heating and clean district heating to account for more than a third of equipment installations by 2030.

Fortunately, cooling technology in buildings and the introduction of building ratings is showing signs of progress with very rapid growth in recent years. Mandatory and stringent guidelines continue to improve slowly but steadily, and energy performance standards for air conditioning have been introduced in nearly all major cooling demand markets globally.

A need for Innovation

To keep the building sector on track, advances in device and equipment performance must also accelerate to ensure that more net zero buildings are constructed. Today’s energy standards and labels cover only one-third of device energy usage, and policy coverage is poor in a market expected to grow rapidly over the next decade.

However, this gap also presents many opportunities for innovation which can support the energy transition, for example, integrated heat storage, advanced insulation to reduce heat loss and gain, and low-emissivity windows all have great potential. Innovation gaps in solar thermal and advanced district energy and the need for research and development of renewable façades integrated with solar cooling were identified. The area of ​​lighting improvement includes the commercialization of organic LED technology, but innovations in device efficiency must play a key role in building energy consumption.

The building sector with a cumulative of these inputs will also create a diverse investment scenario encouraging more financial flow for future developments and innovation as we aspire to more net zero buildings.

To learn more: Join Our Event "The Green Real Estate: Beyond Net Zero" on February 9th 2023!


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