“The priority in my work is to reduce energy demand as much as possible and as quickly as possible.”
When a big real estate company wants to make its buildings more energy efficient, the retrofitting process is, well, complex. One trend creating hope in the sector is the use of artificial intelligence and advances in energy research to improve data-gathering methods. Cedrus is a European leader in this new process.
Cedrus, based south of Paris in Massy, shows how a real estate project can cut energy consumption with precise research and new digital tools. Much of the company's work is done remotely and without site visits, saving time and money. Cedrus says it can substantially cut real estate projects’ energy expenses.
“Now we go from two weeks of analysis using traditional methods that include site visits, 3D modelling, staff time for studying and writing to a couple of hours of analysis per building using our current technology,” says Emilio Sassine, a co-founder of Cedrus. “By scraping public data, by analysing satellite images and by processing the building reports using advanced AI techniques, we save a lot of time and money, and can work on many more projects.”
Energy efficiency in buildings has long been seen as the vital front line of the battle against climate change, even if it’s less glamourous than the dazzling machines that make renewable energy. The investments needed to do this work are far behind the levels required to fight global warming. Building improvements such as adding insulation and/or incorporating energy management systems may be less impressive than giant wind turbines and solar parks, but these have game-changing potential for climate action and for consumers’ energy bills.
These renovations are not cheap and financing is key—Cedrus is backed by 4elements, a French venture capital firm that in turn is supported under the InvestEU programme by the European Investment Fund, a part of the European Investment Bank Group. Companies and governments are using new technologies aided by artificial intelligence to speed up the task of saving the energy that constantly leaks out of our homes and offices. Energy efficiency is where the urgent need for sustainable houses and buildings meets the existential challenge of global warming and the drive for more efficient digital technologies. This article tells the story of the people who are getting the job done across Europe.
Long way to go, short time to get there
Europe faces mounting pressure to reduce carbon emissions. The European Union aims to be carbon neutral by 2050. You might think cars or steel mills are the top bad guys for global warming, but buildings are Darth Vader and the Wicked Witch of the West combined. Buildings consume about 40% of energy in Europe and are responsible for around 35% of greenhouse gas emissions. The European Commission estimates that 75% of buildings and housing needs an energy efficiency upgrade, but less than 1% of housing is renovated each year for efficiency.
The European Investment Bank is an important partner in REPowerEU, a European Commission plan to cut Europe’s dependence on fossil fuels. The EIB Group also has approved a new housing plan that boosts finance and knowledge while building better new homes and improving old ones. The plan calls for more innovative materials and techniques that will have big energy efficiency benefits. This decade, the EU's financing arm has invested nearly €150 billion in the energy sector in Europe, including a record of €30 billion in 2024. It has financed more than €50 billion directly in energy efficiency this decade. The Bank’s three focus areas:
1) fixing leaky old buildings and homes
2) better energy performance in new buildings
3) more energy efficiency investments for businesses.
“The priority in my work is to reduce energy demand as much as possible and as quickly as possible,” says Daniela Bachner, an energy expert who is on a task force at the European Investment Bank that's coming up with new answers to the housing crisis. “Energy efficiency may not be that visible, but its impact is profound. This work is a win-win for homeowners and the environment.”
The European Commission says energy efficiency investments in Europe need to double in the coming decade. Energy efficiency is sometimes called the “first fuel” in the clean energy transition, as it provides some of the quickest and most cost-effective options to cut carbon emissions while lowering energy bills. Most of the renovation projects to be done are too small to get direct help from the European Investment Bank. The Bank helps small projects by working with cities, housing companies, energy service companies, investment funds, big corporations and private banks that have local connections. The European Investment Bank is supporting social housing companies in Spain, Poland, France, Ireland, Germany and elsewhere. It also offers technical assistance to smaller projects to help people understand energy losses and complete renovations.
Nasuvinsa
A typical example of the benefits of energy efficiency—and its costs—is the 30 social housing units renovated by Espacil, a social housing company in Chantepie, northwest France. Espacil retrofitted three buildings from 2022 to 2024. The retrofit makes the students and young families living there more comfortable and saves them money on their bills. It also helps fight climate change, because less energy wasted means less carbon dioxide emitted.
"Before we did this work, the buildings had low energy efficiency and emissions ratings, but now the energy use has been reduced by nearly 60% and created big savings for residents,” says Jean-François Hallard, the construction director for the project near Rennes.
Espacil received a €903,000 loan for the work from the French government's investment arm, Caisse des Dépôts (CDC), via its affordable and sustainable housing bank, Banque des Territoires. The CDC signed a €1 billion loan with the European Investment Bank in 2021 to enhance energy efficiency in residential buildings across France. This financing enables the deep renovation of about 70 000 dwellings, with an anticipated reduction of at least 40% in energy use.
Energy efficiency checklist
The work on the housing units in Chantepie included some of the most common ways to make homes and businesses more efficient:
- Insulation in walls, attics and floors
- Energy-efficient LED lightbulbs
- Heat pumps that use electricity and extract heat from the air or ground
- Smart thermostats, real-time monitoring of energy use, and other connected devices that turn off heating and lights at certain times
- Better building designs that use energy efficiency as a key design element
- New doors and windows
- Better ventilation systems
Energy efficiency projects like Chantepie are having big results. The International Energy Agency says energy efficiency improvements reduced global energy consumption by 12% from 2010 to 2020. In one study, the US Department of Energy says energy-efficient upgrades reduce utility bills 25% to 30%.
The European Union estimates that energy efficiency work reduced fossil-fuel imports by between 5% and 6% in the decade to 2020. It also estimates that achieving energy efficiency and decarbonisation goals for buildings alone will require an extra €275 billion annually in investment in the building sector until 2030. This includes costs for insulation, heating systems, smart energy management and renewable energy such as solar panels.
Digital technology has an increasing role to play in these savings.
Like Cedrus, many companies in the energy efficiency field will need to start using artificial intelligence, apps and other digital advances to get bigger energy reductions and reduce the costs of energy efficiency projects.
Cedrus
AI for energy efficiency
Germany's PAUL Tech uses artificial intelligence hardware and software that communicate with sensors connected to traditional products in an apartment building, such as radiator pipes. Energy consumption data is collected continuously from inside and outside the building. AI software analyses this data in real time and adjusts the flow of heating water, for example, so that each radiator receives only as much as it needs.
- Read how a German company installs Internet-of-Things tech to improve energy efficiency.
About half of German residential buildings’ heating systems are more than 30 years old, leading to big energy bills for tenants. PAUL Tech says its technology can cut energy consumption—and bills—by 40%. As an added benefit, the company minimizes investment costs for homeowners because they pay no renovation costs. PAUL Tech acts like an energy service company, because it plans, supplies and installs all components.
Thanks to a €30 million investment from a fund run by Zürich firm Solas Capital, PAUL Tech offers its advanced heating solutions with no upfront costs. Solas Capital's Sustainable Energy Fund is backed by a direct investment from the European Investment Bank and through the European Commission's LIFE programme, a climate funding instrument.
"If we as a society take building renovation seriously, we need to proceed step by step to bring energy efficiency solutions and green energy into any property,” says Sascha Müller, PAUL Tech’s founder and chief executive. “We can achieve the energy transition in buildings.”
Social housing companies to the rescue
In 2020, the European Investment Bank signed a €20 million loan to help the Polish city of Szczecin build and refurbish residential buildings for energy efficiency and comfort. This project is part of larger urban regeneration programme in the historic part of the city that limits vehicle traffic, encourages cycling and aims to attract more retailers.
Grażyna Szotkowska, president of the board for one of two housing agencies in Szczecin that used some of the funding from this loan, says the city is a leader in cutting emissions in housing. That's because many of its big residential buildings are connected to the city’s central heating, rather than having small boilers in every apartment.
“We also are adding thick layers of insulation to many social housing buildings,” Szotkowska says. “Most importantly, they are getting triple-glazed windows, which are highly efficient in terms of energy loss but also block road noise. Better insulation and windows also mean lower energy consumption, which reduces the costs for the tenants.”
Lower expenses for homeowners, tenants and building owners is a topic energy experts always mention.
“Energy improvements are one of the main advantages of housing upgrades, as they help reduce energy bills for households while also cutting carbon emissions,” says Gladys Sevilla, an EIB loan officer who works on housing projects.
In other words, governments may like energy efficiency because it cuts carbon emissions or because it reduces the need to build new homes to beat the housing crisis. Residents like energy efficiency because it saves them money and increases the value of their homes.
Fix everything at once
Tipperary Energy Agency
One new energy efficiency focus in Europe is the one-stop energy shop that provides technical assistance, financing guidance and project planning to homeowners and businesses. Take the programme in County Tipperary in Ireland that prepares energy audits and feasibility studies for residents who want to modernize their homes. Residents are encouraged to improve insulation, windows, ventilation and fireplaces, and to add solar panels or heat pumps.
- Read how Ireland is creating low-energy superhomes.
In this part of southern Ireland, many people still use coal fireplaces to heat their homes. A social enterprise called the Tipperary Energy Agency helped create in 2021 a “superhomes” initiative that is a countrywide one-stop energy efficiency shop looking after each stage of a family’s home energy renovation project.
Energy programmes like this in Ireland save money by lowering bills, but they also improve people’s living conditions. This work in Ireland is similar to many other EIB projects supported by ELENA, the programme that prepares energy efficiency projects across Europe. ELENA stands for European Local Energy Assistance.
How much will you save?
The hardest part of Raquel Zulaica Oroz’s job is the moment she stands in front of a hundred or more people and tells them to invest more money in their homes. Some of the audience members are angry, some wonder if they are wasting their time and others want to go home.
“The changes we propose are important for their lives and for the climate,” says Zulaica, an architect who supervises renovations to big residential buildings for Nasuvinsa, a governmental association helping social housing in the Navarra province of northern Spain. “Once people realise that I am not there to take their money and that I really want to make their lives comfortable, they start to accept the improvements we’re suggesting.”
Nasuvinsa
Nasuvinsa runs eight one-stop shops that help refurbish residential buildings. Zulaica holds meetings with residents of big buildings in cities and villages to explain how she can help get them grants and loans that will make their apartments less costly and more comfortable by insulating the outside walls and roofs, adding new windows and sometimes replacing the boilers.
“The quality of some of the buildings I assist is very poor, with construction that is more than 50 years old,” Zulaica says. “So imagine when there is a lot of sun, their homes get hot. When it is cold and windy, they really feel it. When it rains, the homes get moldy.”
The European Investment Bank signed a €24 million loan in 2022 with Nasuvinsa to build housing and refurbish old homes in economically vulnerable communities across Navarra. An EIB Advisory team also helped the Navarra region with a €2.48 million grant to support a network of one-stop shops. Advisory work helped expand energy audits, feasibility studies and make detailed assessments to ensure that each project maximises energy savings.
“We’re helping people,” Zulaica says. “We are convinced that this is good work and good for society.”
Read all of our ‘Invested in Housing’ series
Why is there a housing crisis and how do we fix it?
High house prices are hurting young people, vulnerable groups and the European economy. Solutions include expanding supply with faster and cheaper construction, more financing and less red tape.
How innovation is improving construction
Here are the innovations that are already making housing more affordable and sustainable.
How to finance sustainable housing: Coming 3 July
Construction firms can't get the financing they need to fix the housing crisis. Here are the financial tools that are going to help fix the problem.
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