The Untapped Potential of Building Retrofitting

Brief

Discover how retrofitting buildings can dramatically reduce global energy demand by 12%, enhancing efficiency and yielding economic benefits.

Insight

The 2024 World Economic Forum’s report, featured at the Davos Annual Meeting, highlights a significant opportunity in energy efficiency through building retrofitting. This approach could slash global energy demand by 12%, addressing a critical need in the fight against energy waste.

Currently, buildings, industry, and transport constitute 94% of global energy demand. Specifically, buildings, consuming 30% of the world’s energy, offer the greatest potential for energy savings. The report emphasizes the importance of reducing energy intensity – the energy required per unit of gross domestic product – particularly in the buildings sector.

Retrofitting plays a pivotal role in realizing these energy savings. With 75% of the 2050 expected building infrastructure already existing, retrofitting is not just beneficial but essential. The report outlines innovative financial models to overcome retrofitting costs, such as interest-free financing repaid via energy bills, energy-as-a-service models to remove upfront costs, risk insurance policies for stakeholders, collaboration with educational institutions for skilled labor, and regional industrial cooperation for material supply.

Beyond the obvious energy savings, retrofitting offers numerous additional benefits. These include a 20% reduction in staff sickness, enhanced employee productivity (potentially adding up to $7,500 per person annually), and the creation of 3.2 million new jobs each year. Furthermore, the asset value of retrofitted buildings can increase by around 15%.

This comprehensive approach not only aids in energy reduction but also presents a lucrative opportunity for stakeholders in the real estate sector, marking a significant step forward in the energy transition movement.

Highlight

This approach could slash global energy demand by 12%, addressing a critical need in the fight against energy waste.
These include a 20% reduction in staff sickness, enhanced employee productivity (potentially adding up to $7,500 per person annually), and the creation of 3.2 million new jobs each year.
Furthermore, the asset value of retrofitted buildings can increase by around 15%.