Siemens Financial Services report reveals $2.2bn 'investment gap' in energy efficiency financing across European healthcare buildings
Climate targets across the world are accelerating the implementation of smart, decarbonised, energy-efficient buildings.
This is particularly relevant to the healthcare sector in the UK, which is committed to becoming carbon neutral by 2045 at the latest.
In order to meet climate change commitments, however, building stock requires significantly-higher investment – around three times the current rate, according to research by Siemens Financial Services (SFS).
And, to address this, smart financing is becoming an increasingly-popular solution.
The investment gap
SFS has released a new insight study entitled Financing Decarbonization: Smart Buildings, which estimates the ‘investment gap’ between current levels of investment in renovating the office, hospital, and education estate, and the actual level needed to meet accelerated decarbonisation targets by 2050.
Part of a series on financing decarbonisation, the research focuses on buildings – which account for 36% of final energy use – as a prime target for energy-efficiency initiatives, and a major potential contributor to climate target attainment.
Not only can smarter building stock better cope with this change, it will contribute significantly to a cleaner and greener future
The ‘gap’ represents a substantial shortcoming in each of the four countries studied, specifically: USA ($1bn for hospitals); China ($2.7bn); India $0.6bn); and Europe $2.2bn).
And the research finds that smart buildings – which incorporate hot-desking, health and safety, information access controls, security, infection mitigation, and more – are best suited to ensure more-efficient use of public buildings, significantly-reduced energy usage and emissions, and the transformation of buildings into far-more-sustainable assets for society.
In order to bridge the gap between current investment levels and the required volumes, smart financing methods are being offered by private-sector finance.
These solutions seek to make the conversion to decarbonised, energy-efficient, smart buildings affordable for owners.
Financing tools can ease cash flow and align costs to the rate of benefits gained.
And smart financing also has the potential to make the transition to decarbonisation budget neutral by harnessing future savings to pay for current investment.
“Our use of buildings has been disrupted and altered by the pandemic,” says Jo Harris, sales director for commercial finance Ukat SFS.
“Not only can smarter building stock better cope with this change, it will contribute significantly to a cleaner and greener future.
“Smart financing solutions can accelerate the rate of transformation, helping buildings owners to achieve net-zero carbon building stock by 2050.”
The research explored proprietary data from SFS on cost of energy efficiency renovation per sq m in existing buildings and was applied to the total footprint of the hospital estate for each country or region studied.
Smart financing solutions can accelerate the rate of transformation, helping buildings owners to achieve net-zero carbon building stock by 2050
The total cost of energy efficiency renovation was calculated based on the Global Alliance for Building and Construction’s estimate of the percentage of building stock that would have to be converted by 2040 to meet current climate targets.
Then, the cumulative percentage of actual current renovation rates was projected to 2040 and the cost of renovation calculated at those current rates.
The investment gap is the difference between current energy efficiency renovation rates and the projected rate of renovation needed to meet climate targets.