Building Optimization

Exploding Gas Prices - How the Crisis Can Become an Opportunity

High energy price increases are currently the result of the tight gas supply situation in Germany. In addition to the expansion of renewable energies, the optimized use of energy in buildings and operational optimization in public, commercial and industrial facilities play a crucial role in saving energy quickly and efficiently.

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High energy price increases

are currently the result of the tight gas supply situation in Germany. A gas shortage in the coming winter is becoming increasingly likely. Federal Economics Minister Habeck declared an alert on June 23, 2022. Russia recently curbed gas supplies through the Nord Stream I pipeline to just 20 percent. The gas levy now agreed and the reduction in VAT on gas consumption are intended to relieve both end customers and gas importers. However, in addition to savings and additional gas supplies, long-term independence from fossil raw materials is essential and the top priority in the crisis.

According to the Federal Statistical Office, imported natural gas was already 235.6 percent more expensive in May 2022 than a year earlier.

What happens in case of emergency?

The emergency status can only be declared by decree of the federal government. If supply shortages occur, critical infrastructure and private households will be supplied with priority. Industry will have to reckon with restrictions at an early stage. The Institute of the German Economy warns of the consequences of such restrictions: If the price of gas doubles in the fall, inflation could rise by up to 4 percentage points next year and more than 300,000 people could lose their jobs. This does not even take into account complete production stoppages.

Turning the crisis into an opportunity

The summer months are now being used intensively by politicians and industry to identify short-term savings potential, initiate pay-as-you-go procedures, examine subsidies, but also to find long-term ways out of dependence on fossil fuels.

  • For example, so-called LNG terminals are planned to feed liquefied natural gas into the German gas grid.
  • Another alternative to heating with gas is hydrogen. However, this cannot currently be transported via the existing gas networks. The possibility of converting the networks to import green hydrogen from the United Arab Emirates and Qatar is currently being examined.
  • In addition, the German government is planning a heat pump offensive with 500,000 new pumps annually nationwide starting in 2024.
  • One controversial measure is the increased use of coal-fired power plants to generate electricity in order to store gas for the winter.
     

What businesses, facilities and property owners can do now

While renewable energies already account for 50 percent in the electricity sector, the heat transition continues to be the laggard, as the renewable share here is only 15 percent, according to the Heinrich Böll Foundation. The Ukraine war has now dramatically increased the need for an acceleration in rethinking, which was already clearly formulated in the context of climate protection. In addition to the expansion of renewable energies, the optimized use of energy in buildings and the optimization of operations in public, commercial and industrial facilities play a crucial role. Companies, landlords and public facilities have several short-, medium- and long-term levers at their disposal to be among the pioneers in the heat transition:

  • The acceleration of digitization and the use of AI can already save 40 percent energy and thus operating costs and CO2 in the medium term. With the smart use of data, a building can quickly be operated more sustainably and efficiently. Here, there are numerous plug and play software solutions to save resources.
  • The use of renewable energies makes buildings independent of raw material imports. Buildings, residential complexes or office complexes can be operated more sustainably with heat pumps, for example. Conversion of existing buildings is also supported by the German Federal Ministry of Economics and Climate Protection.
  • Companies should check their fuel-switch options as appropriate. In some places, heating oil tanks or burners are still available that can fire other fuels in addition to gas. Coal or wood firing can also be short-term interim solutions. However, the legal requirements are complex and companies should familiarize themselves with the legal situation and technical hurdles early on. 
     

The heat pump boom and its barriers

154,000 heat pumps were installed in 2021 and this number is expected to rise significantly this year. This environmentally friendly way of generating heat makes people less dependent on fossil fuels. Under the right conditions, they are highly efficient, produce no emissions on site, can be powered by green electricity, and increase property values. In addition to all the good reasons for the heat pump offensive, however, there are currently hurdles on the market:

  • Shortages of personnel and materials are making the changeover immensely difficult. In some places, waiting times can be up to a year or longer.
  • In order to prevent the shortage of skilled workers, more advanced training must be offered and training must be adapted. Furthermore, the use of digital tools is worthwhile in order to speed up implementation and relieve the work force in this area. 
  • According to the industry association BNE, there is also a need for relief on electricity prices and a subsidy freeze for gas heating. The latter is already being implemented.
  • Only a rapid advance in digitization and the use of AI can exploit the full savings potential in heat pump use.

Heat pump, yes or no?

Thanks to heat pumps, there is an opportunity in all areas to retrofit an efficient and future-proof technology that saves costs, makes us independent of fossil fuels and makes an important contribution to global climate protection. The current funding opportunities make a conversion even more attractive, despite waiting periods. A cost estimate and a reliable decision document are the first important steps. aedifion offers an all-round support with recommendations for the individual optimal heating cost strategy. This includes a recommendation for the dimensioning of the heat pump based on real operating data as well as an estimate of the potential investment and heat supply costs in order to specifically work out the best solution in each case.

Even while waiting for the delivery of the heat pump or photovoltaic system, the time should be used for the implementation of measures of operational optimization.

Find all information you need on how to future-proof your real estate: Energy efficient buildings

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