COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS An EU Strategy on Heating and Cooling
Date: 2016-02-16
Institutions: Directorate-General for Energy, European Commission
Subjects: EU programme, air conditioning, energy consumption, energy efficiency, energy saving, energy supply, heating, new technology, reduction of gas emissions, renewable energy

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 16.2.2016  COM(2016) 51 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS An EU Strategy on Heating and Cooling {SWD(2016) 24 final}  
 
 
1.  INTRODUCTION 

Heating and cooling consume half of the EU's energy and much of it is wasted. Developing a 
strategy  to  make  heating  and  cooling  more  efficient  and  sustainable  is  a  priority  for  the 
Energy  Union1.  It  should  help  to  reduce  energy  imports  and  dependency,  to  cut  costs  for 
households  and  businesses,  and  to  deliver  the  EU's  greenhouse  gas  emission  reduction  goal 
and  meet  its  commitment  under  the  climate  agreement  reached  at  the  COP21  climate 
conference in Paris.  

Although  the  heating  and  cooling  sector  is  moving  to  clean  low  carbon energy,  75%  of  the 
fuel  it  uses  still  comes  from  fossil  fuels  (nearly  half  from  gas).  While  this  strategy  will 
contribute to reducing import dependency, security of supply remains a priority, especially in 
Member States that rely on a single supplier2.  

Heating  and  cooling  and  the  electricity  system  can  support  each  other  in  the  effort  to 
decarbonise. It is essential to recognise the links between them and exploit synergies.  

This  strategy  provides  a  framework  for  integrating  efficient  heating  and  cooling  into  EU 
energy  policies  by    focusing  action  on  stopping  the  energy  leakage  from  buildings, 
maximising  the  efficiency  and  sustainability  of  heating  and  cooling  systems,  supporting 
efficiency  in  industry  and  reaping  the  benefits  of  integrating  heating  and  cooling  into  the 
electricity system. It is accompanied by a Staff Working Document giving an overview of this 
complex sector3. The solutions will be examined in the ongoing reviews of legislation under 
the Energy Union.  

A smarter and more sustainable use of heating and cooling is within reach as the technology is 
available.  Actions  can  be  deployed  rapidly,  without  prior  investment  in  new  infrastructure, 
and with  substantial benefits for both  the economy and individual consumers, provided that 
(household) consumers can afford to invest or have access to the finance needed to do so.  

2.  VISION AND GOALS  

To  achieve  our  decarbonisation  objectives,  buildings  must  be  decarbonized.  This  entails 
renovating the existing building stock, along with intensified efforts in energy efficiency and 
renewable  energy,  supported  by  decarbonized  electricity  and  district  heating.  Buildings  can 
use automation and controls to serve their occupants better, and to provide flexibility for the 
electricity system through reducing and shifting demand, and thermal storage.  

Industry  can  move  in  the  same  direction,  taking  advantage  of  the  economic  case  for 
efficiency and new technical solutions to use more renewable energy. In this sector, however, 
some  fossil  fuel  demand  can  be  expected  for  very  high  temperature  processes.  Industrial 
processes  will  continue  to  produce  waste  heat  and  cold,  as  will  infrastructure.  Much  of  it 
could be reused in buildings nearby. 

While this is a vision for the longer term, big gains can be reaped immediately. 

1  COM(2015) 80 final. 

2 See accompanying Proposal for a Regulation concerning measures to safeguard the security of gas supply and 
Communication on an EU strategy for liquefied natural gas and gas storage. 

3 SWD(2016)24. Sources for the data in this document can be found there. 

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3.  CHALLENGES  
With 50% (546 Mtoe) of final energy consumption4 in 2012, heating and cooling is the EU’s 
biggest energy sector. It is expected to remain so.  

Renewables accounted for 18% of the primary energy supply for heating and cooling in 2012, 
while fossil fuels accounted for 75%.  

Figure 1: Primary energy for heating and cooling, 2012 

With  the  EU  targets  for  2020,  renewable  energy  is  growing.  In  their  National  Renewable 
Energy Action Plans, each Member State adopted a renewable energy target for heating and 
cooling.  Most  are  on  track  to  achieve  them;  some  are  switching  faster  than  planned5. 
Renewable  energy  sources  (RES)  share  of  energy  used  in  heating  is  highest  in  Baltic  and 
Nordic Member States (ranging from 43% in Estonia to 67% in Sweden). Biomass is the most 
widely  used  renewable  energy  for  heating  today,  representing  some  90%  of  all  renewable 
heating. The Commission  will propose  at the end of 2016 a bioenergy  sustainability policy, 
which will take into account the impact of bioenergy on the environment, land-use and food 
production. 

4 684 Mtoe of primary energy. 

5 COM(2015) 293 final.  

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Figure 2: Final energy consumption for heating and cooling, 2012 

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Natural gas

Coal

Other fossil

Biomass

Fuel oil

District heating

Electricity

Waste non-RES Waste RES

Solar energy

Geothermal

Ambient heat

45%  of  energy  for  heating  and  cooling  in  the  EU  is  used  in  the  residential  sector,  37%  in 
industry and 18% in services. Each sector has potential to reduce demand, increase efficiency 
and shift to renewable sources.  

Barriers to energy renovation of buildings 

Buildings (and people living in them) are the first consumers of heating and cooling. Space 
heating accounts for more than 80% of heating and cooling consumption in colder climates. In 
warmer climates, space cooling is the most important - and is growing.  

Buildings frequently lose heat or cold due to poor quality. Two thirds of the EU's buildings 
were  built when  energy  efficiency  requirements  were  limited  or  non-existent;  most  of  these 
will  still  be standing  in  2050.  Big  savings  can  be  made  through  simple  renovations  such  as 
insulating the attic, walls and foundations, and installing double or triple glazing6. These are 
cheapest when they are done as part of other building works. Nature-based solutions, such as 
well-designed  street  vegetation,  green  roofs  and  walls  providing  insulation  and  shade  to 
buildings also reduce energy demand by limiting the need for heating and cooling. 

Different  forms  of  building  ownership  require  different  measures  to  drive  energy-efficient 
renovation.  

Around 70% of the EU population lives in  privately owned residential buildings. Owners 
often do not undertake cost-efficient renovations because they lack awareness of the benefits, 
lack advice on the technical possibilities, face split incentives (for instance in multi-apartment 
buildings) and have financing constraints.  

In privately-owned rented buildings – a large share in some countries – the main challenges 
are split incentives, tenancy rules and finance. Incentives are 'split' in the sense that property 
owners have little incentive to invest if the tenant pays the energy bill. Some countries have 

6  Given  the  long  lifetime  of  buildings,  it  is  essential  to  encourage  design  improvements  that  will  reduce  their 
environmental impacts and increase the durability and recyclability of their components in line with the Circular 
Economy Communication (COM(2015) 614 final). 

4 

 
 
                                                            
 
 
systems under which lower energy costs due to energy efficiency improvements can be used 
to justify an increase in the rent.  

Buildings  owned  by  public  bodies,  including  social  housing,  account  for  a  considerable 
share  of  the  stock.  Buildings  like  schools,  universities  and  hospitals  are  highly  visible  and 
often energy intensive.  

The  main  challenge  for  renovation  of  public  buildings  is  shortage  of  funds.  Energy 
Performance  Contracting7  and  Energy  Service  Companies  (ESCOs)  can  offer  technical 
assistance, expertise and access to capital. In the US, it is standard practice to involve ESCOs 
in  refurbishing  public  sector  buildings,  and  the  sector  has  revenues  of  more  than  USD  6 
billion. In the EU, this market is underdeveloped. 

Service buildings, such as banks, offices and shops, make up a quarter of the stock. Energy 
consumption  per  square  meter  is  on  average  40%  higher  than  in  residential  buildings. 
Electricity  consumption  is  particularly  high  with  complex  systems  for  lighting,  air 
conditioning  or  ventilation.  This  sector  also  consumes  most  of  Europe's  space  cooling8. 
Refrigeration demand is high in supermarkets (where it typically accounts for more than 40% 
of energy consumption) and data centres (25-60% of operating costs).  

Lack  of  expertise  and  training  affects  all  sectors.  Too  few  professionals  have  the  required 
expertise in energy efficient construction and in efficient and renewable energy technologies. 
Architects can incorporate advanced design and construction materials and smart technologies 
into  all  aspects  of  buildings,  from  insulation  to  lighting.  But  installers  are  the  “market 
makers” for many technologies. 

On average, Europeans spend 6% of their consumption expenditure on heating and cooling; 
11% cannot afford to keep their homes warm enough in winter. Consumer choice is limited 
by  a  lack  of  information  on  actual  energy  consumption  and  costs,  and  often  by  lack  of 
financial  means  to  invest  in  the  most  efficient  technology.  It  is  difficult  to  compare 
technologies and solutions on the basis of lifetime costs and benefits, quality and reliability.  

Financing 

Despite  the  compelling  economic  rationale,  there  are  few  attractive  financial  products  for 
building renovation. 

The  EU  budget  for  2014-2020  significantly  increased  its  contribution.  The  European 
Structural  and  Investment  Funds  (ESIF)  will  allocate  some  EUR  19  billion  for  energy 
efficiency and EUR 6 billion for renewable energy, notably in buildings and district heating 
and cooling, around EUR 1 billion for smart distribution grids, and funding for research and 
innovation  based  also  on  priorities  chosen  in  the  national  or  regional  Smart  Specialisation 
Strategies.  The  Horizon  2020  research  and  innovation  programme  will  allocate  EUR  2.5 
billion for energy efficiency and EUR 1.85 billion for renewable energy. Furthermore, due to 
the  European  Fund  for  Strategic Investments  based  on  the EU  guarantee,  mobilisation  of  at 

7  Energy  Performance  Contracting  allows  energy  upgrades  to  be  funded  from  cost  reductions.  An  ESCO 
implements  a  project  to  deliver  energy  efficiency  or  renewable  energy,  and  uses  the  cost  savings/renewable 
energy sales to repay the costs.  

8 The service sector consumed 96 Mtoe of final energy in 2012 for heating and cooling. Space heating accounted 
for 62% of this; cooling for 19%; hot water for 14%; and process heating for 5%. 

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least  315  billion  EUR  of  additional  investment  is  expected.  Boosting  investment  in 
sustainable energy projects is one of strategic priorities of EFSI and some of them have been 
already approved.  

But public finance neither can nor should play the primary role. The energy efficiency market 
must  mature  and  become  fully  investible.  As  confirmed  in  the  report  from  the  Energy 
Efficiency  Financial Institutions  Group (EEFIG)9, project promoters and investors still need 
to  understand  and  trust  that  energy  cost  savings  lead  to  additional  available  cash-flow  and 
better  energy  performance  leads  to  higher  asset  values.  The  Commission  will  address  these 
issues under the 'Smart Finance for Smart Buildings' initiative, in cooperation with EEFIG, as 
announced in the Energy Union Strategy.   

Heating and cooling equipment 

Almost  half  of  the  EU's  buildings  have  individual  boilers  installed  before  1992,  with 
efficiency of 60% or less. 22% of individual gas boilers, 34% of direct electric heaters, 47% 
of oil boilers and 58% of coal boilers are older than their technical lifetime.  

Decisions  on  replacing  old  appliances  are  typically  made  under  pressure,  when  the  heating 
system breaks down. Comparison of prices between solutions, as well as information on how 
their existing system performs, is not easily available for most consumers. This leads them to 
continue using older, less efficient technologies.  

In  some  parts  of  Europe,  up  to  three  quarters  of  outdoor  fine  particulate  matter  pollution  is 
attributable  to  household  heating  with  solid  fuels  (including  coal  and  biomass).  The 
Commission  has  initiated  infringement  procedures  on  ambient  air  quality10  against  several 
Member  States,  referring  two  cases  regarding  persistently  high  levels  of  fine  particulate 
matter to the European Court of Justice in 2015. The Commission warns about the negative 
impact on air quality from the use of coal (lignite) and boilers and stoves with poor emission 
standards11 for heating as healthier solutions are available, easily accessible and more efficient 
and cheaper in the long run. 

Ecodesign  and  energy  labelling  requirements  for  space  and  water  heaters  came  into 
application in 2015. The sale of inefficient boilers is now banned. Consumers see efficiency 
ratings – both for single technologies and for packages that include the use of renewables. The 
transition  that  these  measures  are  expected  to  foster  should  bring  annual  energy  savings  of 
600  TWh  and  CO2  emission  reductions  of  135  million  tonnes  by  2030.  At  the  same  time, 
emissions of air pollutants will also be reduced. 

The new Regulation on fluorinated greenhouse gases12 will also accelerate the refurbishment 
of heating and cooling. Climate-friendly refrigerants offer great energy saving potentials, but 

9  EEFIG  (www.eefig.eu)  was  set  up  by  the  European  Commission  and  the  United  Nations  Environment 
Programme Finance Initiative in 2013 to increase energy efficiency investments across the EU.  

10  Directive 2008/50/EC. 

11  In  some  Member  States  the  use  of  biomass  in  households  contributes  to  more  than  50%  of  their  national 
emissions of particulate matter. 

12 EU Regulation 517/2014. 

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require for some applications an update of existing standards to ensure their safe use. To that 
end the Commission has initiated the process of reviewing the relevant European standards. 

A  good  time  to  replace  an  old  heating  system  is  when  a  building  is  refurbished. 
Transformation  to  an  efficient  building  makes  it  possible  to  shift  to  heat  pumps,  solar  or 
geothermal heating or waste heat. These appliances save costs. Heat pumps can turn one unit 
of electricity or gas into 3 or more units of heating or cooling, while solar thermal does not 
need  fuel  input  for  heating.  In  addition,  there  is  a  number  of  innovative  highly  efficient 
technologies that quickly approach market-readiness, such as stationary fuel cells. 
Figure 3: Efficiency rating of new space heating appliances13  

A  wide  range  of  renewable  heating  and  cooling  solutions  is  available  and  scaling-up  the 
market  would  reduce  their  price.  The  Energy  Labelling  Directive  (2010/30/EU)  states  that 
Member State incentives for products such as heaters need to aim at the highest performance 
levels.  In  line  with  the  G20  2020  statement  about  inefficient  fossil  fuel  subsidies,  the 
Commission is calling on Member States to focus incentives on non-fossil fuel based heating 
and cooling technologies. 

Cooling  comes  mostly  from  electric  devices,  although  there  are  promising  innovative  low 
energy  cooling  technologies.  A  recently  adopted  ecodesign  regulation  covering  cooling 
products completes the set of requirements for heating and cooling. It will bring fuel savings 
of 5 Mtoe per year in 2030, corresponding to 9 million tonnes of CO2. 

Industry 

Industry accounted for a quarter of the EU's final energy consumption in 2012. 73% of this is 
used for heating and cooling. European industry has cut  its energy intensity twice as fast as 
the US since 2000. The improvement rate is steeper in energy intensive sectors14. The reason 
is clear: energy is an important cost. By putting a price on CO2 emissions, the EU Emissions 
Trading  Scheme  has  provided  an  incentive  to  use  low  carbon  fuels  and  to  invest  in  energy 
efficiency.    

13 Packages of space or combination heaters, temperature control and solar device ranked A+++ include a heat 
pump or a heater using fossil fuel or biomass, temperature controls and a solar device. 

14 The chemical sector halved its energy intensity over the last 20 years.  

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Significant  potential  remains.  Using  existing  technologies,  it  is  possible  to  reduce  energy 
costs  in  industry  by  4-10%  with  investments  that  pay  for  themselves  in  less  than  5  years. 
However, the visibility of energy savings is low.  

Collectively, SMEs' energy demand is considerable. They often have fewer resources and less 
access to finance to make improvements. They may lack the capacity to run such projects and, 
not  having  a  direct  carbon-price  incentive,  they  rarely  view  energy  efficiency  as  a  priority, 
especially in their early years.  

Financial  institutions  often  remain  reluctant  to  provide  financial  products  due  to  perceived 
risks. 

The use of renewable energy in industry is limited. Nearly all is biomass, despite the market 
maturity  –  at  least  for  low-temperature  heat  –  of  heat  pumps,  solar  and  geothermal15.  With 
technological  development,  more  applications  for  medium-temperature  heat  (up  to  250°C) 
will become market feasible.  

Waste heat and cold 

Some  industries  generate  heat  as  a  by-product.  Much  more  of  this  could  be  reused  within 
plants or sold to heat buildings nearby. The same applies to waste heat from power stations, 
the service sector and infrastructure such as metros16.  

Waste  cold  is  generated  in  sites  such  as  liquefied  natural  gas  terminals  and  gas  grids.  It  is 
rarely reused, although the technology to do so is already used on a commercial basis in some 
district  cooling  systems.  Integrating  the  production,  consumption  and  reuse  of  waste  cold 
creates  environmental  and  economic  benefits  and  reduces  the  primary  energy  demand  for 
cold. 

The  barriers  to  the  use  of  these  resources  are  lack  of  awareness  and  of  information  on  the 
resource available; inadequate business models and incentives; a lack of heat networks; and 
lack of cooperation between industry and district heating companies. 

4.  SYNERGIES IN THE ENERGY SYSTEM 

The  future  electricity  grid  will  integrate  more  renewable  energy,  especially  wind  and  solar 
including decentralised supplies. So supply and demand must become more flexible, through 
wider use of demand reduction, demand response mechanisms and energy storage. 

Linking  heating  and  cooling  with  electricity  networks  will  reduce  the  cost  of  the  energy 
system  –  to  the  benefit  of  consumers.  For  example,  off-peak  electricity  can  be  used  to  heat 
water in lagged tanks which can store energy for days and even weeks.  

District heating and cooling 

District  heating  provides  9%  of  the  EU's  heating.  In  2012  the  main  fuel  was  gas  (40%), 
followed  by  coal  (29%)  and  biomass  (16%).  District  heating  can  integrate  renewable 
electricity  (through  heat  pumps),  geothermal  and  solar  thermal  energy,  waste  heat  and 

15 Several small solar thermal process heat systems exist in Europe with heat costs between €38 and €120 per 
MWh. At present solar heat can mainly be used for processes ranging from 20°C to 100°C.  
16  The  technical  potential  has  been  estimated  to  cover  all  the  EU’s  space  heating  demand;  the  economically 
recoverable potential, however, requires analysis of local conditions. 

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municipal  waste.  It  can  offer  flexibility  to  the  energy  system  by  cheaply  storing  thermal 
energy, for instance in hot water tanks or underground.  

District  heating  has  long  traditions  in  Member  States  with  cold  winters.  In  some  countries, 
district heating is seen as an attractive option for companies and consumers and as a means of 
improving  energy  efficiency  and  renewables  deployment.  Elsewhere,  though,  old  systems 
have shrunk due to lack of investment or unfavourable price regulation, low performance and 
negative  consumer  perceptions.  Some  Member  States  are  making  efforts  to  modernise  and 
expand old systems – others, where the technology is hardly known, are building new ones. 
District  heating  and  cooling  can  also  contribute  to  air  quality  objectives,  especially  if  it 
substitutes or avoids solid fuel domestic heating.   

Synergies  between  waste-to-energy  processes  and  district  heating/cooling  could  provide  a 
secure,  renewable,  and  in  some  cases,  more  affordable  energy  in  displacing  fossil  fuels.  A 
forthcoming  Commission's  Communication  on  waste-to-energy  will  address  this  issue  in 
detail. 

Cogeneration of heat and power (CHP) 

CHP can produce significant energy and CO2 savings compared with separate generation of 
heat  and  power.  It  is  used  in  industry  and  the  services  sector  to  save  money  and  ensure  a 
stable and reliable heat and electricity supply.  

Combination with thermal storage increases the efficiency of CHP as heat production can be 
stored rather than curtailed if not needed at that moment. Many CHP technologies are capable 
of  using  renewable  energy  (geothermal,  biogas),  alternative  fuels  (e.g.  hydrogen)  and  waste 
heat.  Tri-generation17  should  also  be  exploited  to  use  the  heat  production  for  cooling  in 
summer. 

The economic potential of cogeneration is not being exploited. The sector faces barriers such 
as the complex need to comply with both electricity and heat supply regulations. Smaller units 
face grid connection and grid access barriers, such as slow processes for granting permits and 
high charges. These regulatory and administrative barriers have not been fully addressed yet 
by Member States. 

Smart buildings 

A smart building connected to a smart grid allows remote or automatic control of heating and 
cooling,  water  heating,  appliances  and  lighting  depending  on  the  time  and  date,  humidity, 
outdoor temperature, and whether the building is occupied. 

The automatic management of energy demand in buildings allows consumers to take part in 
demand  response,  adjusting  the  timing  of  their  consumption  in  response  to  the  price  of 
electricity.  

The  trend  for  businesses  and  households  to  produce  their  own  electricity  opens  new  cost-
containment opportunities. In addition to allowing active participation in energy markets, self-
consumption  can  lower  energy  system  costs  e.g.  solar  PV  can  meet  peak  demand  for 
electricity for air conditioning. Generating and consuming electricity locally can also reduce 
losses to the system and increase its resilience.  

17 Tri-generation refers to the simultaneous generation of three forms of energy - heating, power and cooling. 

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5.  TOOLS AND SOLUTIONS 

Heating  and  cooling  are  produced  locally  in  markets  that  are  fragmented.  Tackling  the 
obstacles  to  more  efficient  and  sustainable  heating  and  cooling  will  require  action  at  local, 
regional and national level, within a supportive European framework.  

Under  the  Energy  Efficiency  Directive  (EED),  Member  States  have  already  developed 
National Energy Efficiency Action Plans setting out actions to reduce demand for heating and 
cooling; building renovation strategies which provide a better framework for investment; and  
comprehensive  assessments  of  the  potential  for  high-efficiency  cogeneration  and  district 
heating. 

The Commission invites Member States: 

-  To  review  their  property  laws  to  address  how  to  share  gains  from  energy 
improvements in private rented properties between landlords and tenants, and how to 
share benefits and costs among residents of multi-apartment buildings. This could be 
set out in the legal status of condominiums or the regulation of building associations;  

-  To ensure that a share of energy efficiency funding is dedicated to improvements for 
energy-poor households or (as a proxy) for those living in the most deprived areas, for 
example, by investing in energy-efficient heating and cooling equipment; 

-  To  work  with  stakeholders  to  raise  consumer  awareness  of  household  energy 
efficiency aspects, and especially with bodies, such as consumer associations, that can 
advise  consumers  about  efficient  and  sustainable  forms  of  heating,  cooling  and 
insulation; 

-  To stimulate the take-up of the recommendations of company energy audits; 

-  To support local and regional actors who can improve the bankability of investments 
through  ‘bundling’  individual  projects  into  bigger  investment  packages.  Initiatives 
such  as  the  ELENA  Facility,  Smart  Cities  and  Communities  and  the  new  integrated 
Covenant of Mayors for Climate & Energy could encourage this approach. 

As part of the Energy Union governance, Member States' national energy and climate plans 
should integrate the heating and cooling sector.  

Buildings 

The  Energy  Performance  of  Buildings  Directive  (EPBD)  lays  down  a  framework  for 
improving  the  energy  performance  of  Europe's  building  stock.  The  uptake  of  energy 
performance  requirements  will  gradually  reduce  energy  demand  and  increase  supply  from 
renewable sources. However, the rate of building renovation is low (0.4 to 1.2% per year).  

As part of the review of the EPBD (including REFIT component) in 2016, the Commission 
will look into strengthening the reliability of energy performance certificates and reinforcing 
their signals for renewable energy. 

The Commission will examine: 

-  Developing  a  toolbox  of  measures  to  facilitate  renovation  in  multi-apartment 

buildings; 

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-  Promoting proven energy efficiency models for publicly owned educational buildings 

and hospitals; 

-  Using  inspections  of  boilers  to  provide  information  on  the  efficiency  of  existing 

heating and cooling systems18; 

-  Facilitating  the  market  uptake  of  voluntary  certification  schemes  for  non-residential 

buildings. 

The  EED  established  consumer  rights  to  information  on  heating  and  cooling  consumption. 
However,  the  frequency  of  metering  and  billing  information  may  still  not  be  sufficient  to 
provide consumers with real- or near- time consumption data.  When preparing the review of 
the  energy  efficiency  legislation  and  the  electricity  market  design  initiative  in  2016,  the 
Commission will look into: 

-  Strengthened feedback to consumers through advanced metering and billing; 

-  Making  advanced  tools  for  metering,  control  and  automation  based  on  real  time 

information standard requirements for service sector buildings;  

-  Empowering consumers to participate in demand response, thus saving them money. 

Renewable-based and efficient heating and cooling  

In the reviews of the EPBD, the EED and the Renewable Energy Directive, the Commission 
will look into:    

-  Promoting  renewable  energy  through  a  comprehensive  approach  to  speed  up  the 
replacement  of  obsolete  fossil  fuel  boilers  with  efficient  renewable  heating  and 
increasing the deployment of renewable energy in district heating and CHP; 

-  Supporting  local  authorities  in  preparing  strategies  for  the  promotion  of  renewable 

heating and cooling; 

-  Setting up a website with price comparison tools on the lifetime costs and benefits of 

heating and cooling systems.  

Smart systems  

Smart  grids,  smart  metering,  smart  homes  and  buildings,  self-generation  and  thermal  and 
electrical and chemical storage need to be promoted by a modern market design.  

As part of the Electricity Market Design, Renewable Energy Directive and EED reviews, the 
Commission will look into: 

-  Rules to integrate thermal storage (in buildings and district heating) into flexibility and 

balancing mechanisms of the grid; 

18  This  is  being  introduced  for  instance  in  Germany.  Boilers  older  than  15  years  will  have  to  be  labelled  by 
experts.  

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- 

- 

- 

Incentivising  citizen  participation  in  the  energy  market  through  decentralised 
production and consumption of electricity; 

Incentivising the uptake of renewable energy in heat production, including CHP; 

Incentivising the take-up of fully interoperable smart buildings solutions, systems and 
appliances. 

The Commission will: 

- 

Intensify cooperation with European consumer associations; 

-  Extend  the  work  of  the  BUILD  UP  skills  campaign to  improve  training  for  building 
professionals, in particular through a new module for energy experts and architects19 ; 

-  Set up sectoral round tables with industry and develop benchmarks/guidance for best 
practice on energy efficiency and renewable energy. Such round table could also feed 
information  into  the  Best  Available  Techniques  Reference  Documents  under  the 
Industrial Emissions Directive;  

-  Provide guidance for companies in identifying cost saving opportunities from energy 

audits and Energy Management System;  

-  Assess  good  practice  in  how  Member  States  can  stimulate  the  take-up  of  the 

recommendations of company energy audits. 

Innovation 

Under the Strategic Energy Technology Plan the Commission will: 

- 

Integrate the results of the industrial sectoral round tables into EU R&D initiatives; 

-  Promote renewable and waste heat based CHP; 

-  Examine new approaches to low temperature heating in industry; 

-  Develop  advanced  materials  and  industrialised  construction  processes  with  the 

construction sector and leading institutions in materials and industry. 

Research, innovation and demonstration actions funded by Horizon 2020 will also support the 
EU strategy on heating and cooling. 

In  addition,  the  Commission  will  support  the  use  of  ESIF  for  the  implementation  of  the 
national and regional heating and cooling-related smart specialisation priorities. 

Financing 

Under the 'Smart Finance for Smart Buildings' initiative the Commission will:  

-  Facilitate  the  aggregation  of  small  projects  into  investible  packages,  and,  with 
EEFIG,  test  a  framework  for  underwriting  procedures  for  financial  institutions  to 
incorporate impacts of energy efficiency in everyday market practice; 

19 BUILD UP Skills is a Commission initiative to boost the education and training of craftsmen and other on-site 
construction workers and system installers in the building sector. The aim is to increase the number of workers 
qualified to deliver nearly-zero-energy buildings and renovations to high energy performance. 

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-  Encourage  Member  States  to  establish  one  stop  shops  for  low-carbon  investments 
(encompassing  advisory  services,  Project  Development  Assistance  and  project 
financing); 

-  Encourage retail banks to offer products adapted for renovation of privately rented 
buildings (e.g. deferred mortgages, term loans) and disseminate best practices, also 
in relation to tax treatment of renovation; 

6.  CONCLUSIONS 

Consumers must be at the centre of this strategy, using modern technologies and innovative 
solutions  to  shift  to  a  smart,  efficient  and  sustainable  heating  and  cooling  system  that  can 
unlock energy and budgetary savings for companies and citizens, improve air quality, increase 
well-being for individuals and provide benefits to society as a whole.  

This  strategy  builds  on  a  solid  base  in  EU  legislation  and  identifies  areas  where  update  or 
reform is  needed to  become future-proof and  deliver on the  Energy  Union objectives. In  its 
2016  impact  assessments  for  the  reviews  of  the  EPBD,  the  EED,  the  Renewable  Energy 
Directive  and  for  the  new  Market  Design  Initiative,  the  Commission  will  analyse  different 
options to help buildings and industry shift to efficient, decarbonised energy systems based on 
renewable  energy  sources  and  the  use  of  waste  heat.  These  analyses  will  include  district 
heating and cooling and electrification of heating through heat pumps. They will study how to 
expand  demand  response  and  reduction  and  the  use  of  thermal  storage  in  the  electricity 
system, how to create the right incentives for the deployment of smart technologies, and how 
to increase the effectiveness of public funds and mobilise private investors.  

The Commission calls on the European Parliament and Council to endorse this strategy.  

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