Energy Transition

Retrofitted buildings are key to the energy transition. 5 ways to unlock progress

When it comes to pushing the energy transition forward, existing real estate presents a major opportunity that comes with benefits for a wide range of stakeholders.

When it comes to pushing the energy transition forward, existing real estate presents a major opportunity that comes with benefits for a wide range of stakeholders. Image: CHUTTERSNAP/Unsplash

Simon Torkington
Senior Writer, Forum Agenda
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Energy Transition?
The Big Picture
Explore and monitor how Energy Transition is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Energy Transition

This article is part of: World Economic Forum Annual Meeting
  • Urgent action is needed to combat the climate crisis and ensure energy security.
  • Buildings offer more energy saving potential than industry or transport.
  • Retrofitting existing buildings could reduce their energy intensity by almost 40%, according to the World Economic Forum’s Transforming Energy Demand report.

Making buildings more energy efficient offers the potential to reduce global energy demand by 12%. That’s a key finding in the 2024 edition of the World Economic Forum’s Transforming Energy Demand, released to coincide with the Forum’s Annual Meeting in Davos.

The report looks at the energy saving potential of three sectors; industry, transport and buildings. Together, these sectors currently represent 94% of global energy demand.

The key metric in the study is energy intensity, a measure of the energy required to produce each unit of gross domestic product. The research shows that buildings have the biggest energy-saving potential of the three sectors.

Short-term reduction potential of energy demand actions (achievable scenario only)
Buildings offer more energy efficiency potential than industry or transport. Image: WEF

In 2022, buildings consumed 30% of the world’s energy. Industry used a 38% share with transport swallowing up 26% of total supplies.

When it comes to energy-saving potential, buildings are out in front with the possibility to reduce energy intensity by 38%. If those savings were achieved in full, global energy demand would be reduced by 12%.

Have you read?

5 ways to save energy in older buildings

Retrofitting older buildings will be key to unlocking the full energy saving potential of the buildings sector. As the report states; “75% of the buildings that will be standing in 2050 already exist”.

The cost of retrofitting buildings remains a barrier to progress, but innovative approaches to financing the renewal of energy and insulation systems could accelerate progress. They include:

1: Interest-free energy efficiency financing schemes, with repayments made via energy bills over a maximum of five years.

2: The development of energy-as-a-service models would eliminate upfront costs. They would also enable energy suppliers and customers to share the benefits and allow co-investment between building occupants.

3: Providing risk insurance policies to be held jointly by property owners, retrofitters and insurers would remove barriers created by parties feeling they have a lack of agency in the process.

4: Cooperation with city authorities, technical colleges and universities to ensure the availability of a skilled talent pool to carry out retrofitting projects.

5: Collaboration within regional industrial ecosystems to ensure a ready supply of materials and recycling services for material removed during retrofitting.

Beyond energy benefits

Retrofitting older buildings brings benefits beyond saving energy. The report identifies additional advantages including; reducing staff sickness by 20%, improving employee productivity (up to $7,500 per person per year) and the creation of 3.2 million new jobs per year. Additionally, asset values of retrofitted buildings increase by approximately 15%.

When it comes to pushing the energy transition forward, existing real estate presents a major opportunity that comes with benefits for a wide range of stakeholders.

Discover

How is the World Economic Forum facilitating the transition to clean energy?

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Energy TransitionDavos Agenda
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

How can a market war for sustainable fuel resources be prevented?

Ameya Hadap, Thibault Villien De Gabiole and Laia Barbarà

February 20, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum