Energy Transition: The Real Estate Challenge - Part Two

The Principality of Monaco has committed to reducing its greenhouse gas (“GHG”) emissions by 55% by 2030, compared with 1990 levels, to achieve carbon neutrality by 2050. In this respect, the Mission for Energy Transition ("MET"), created to manage projects to limit these GHG emissions and develop renewable energy, has set up a national action plan. The latter has been translated over time into the implementation of incentive measures, which we have recently presented to you, together with mandatory rules, particularly in the real estate sector, which currently represents about 35% of GHG emissions.

These energy regulations apply to new buildings, renovations of existing buildings and extensions, and takes into account the Mediterranean and Monegasque specific features.

First, it requires energy audits of buildings starting from January 1st 2022, for buildings completed between 1930 and 1990, January 1st 2025 for buildings completed between 1991 and 2013 and January 1st 2028, for buildings completed before 1930 (Ministerial Order No. 2018-613 of June 26th, 2018. 

The audit consists in a detailed and quantified analysis of the energy performance of a building and enables a proposal for works to improve energy efficiency and reduce GHG emissions, by putting forward technical solutions for optimizing heating, cooling, ventilation, lighting and domestic hot water systems.

The subsidy covers 25, 50 or 75% of the cost of the audit, depending on the year of its realisation and the year of completion of the building, and its amount is capped at € 3,400, 6,700 or 10,000 (the amount is degressive until it disappears at the time of the legal obligation). It is not automatic and is subject to the study of an application file and it is the contracting authorities or co-ownership managers who collect it. 

These energy audits enable to plan the disappearance of fuel oil, used in old public and private buildings for the production of heat and domestic hot water, made compulsory as of January 1st, 2022.

The research units are required to propose alternative solutions to be studied, and to put a cost on them. One of the solutions to be favored is the connection to the thermal energy loop, when it is possible. Indeed, when a building switches from oil to the loop, we see an 85% reduction in GHG emissions.

This thermal process is an operation by which energy, hot or cold, is produced by using the calories from the sea to produce domestic hot water, heat and air-conditioning in buildings. The calories extracted are then injected into heat pumps that work with an electrical power supply.

In November 2020, the Prince’s Government signed a concession agreement for two thermal energy loops in the Larvotto and Condamine districts, in order to reduce by 80% the GHG emissions of the buildings in these areas, by equipping them with heat pumps. The objective is to reduce CO2 emissions by 7% within three years thanks to the deployment of these loops.

The loops cover a surface area of 280,000 sqm that can be connected, i.e. nearly 7% of the total useful surface area of buildings in Monaco, three quarters of which are in the Larvotto district. However, it is not because buildings are eligible to be connected that property managers will necessarily accept the intention to do so. They still have to convince the co-owners.

In cases where this connection would not be possible, a solution is currently being tested in Monaco: the use of bio-oil, and in particular B100, which is a fuel made up of 100% methyl esters of vegetable oils. This is a one-off solution for the energy transition, but it does have a number of disadvantages, with significant impacts on the carbon footprint: it is delivered by truck and its use requires the replacement of part of the installation and more extensive maintenance. Moreover, no scientific feedbacks are yet available.

This is why, whenever possible, it is recommended to connect to the thermal energy loop or to opt for the heat pump solution with good thermal insulation.

Thermal insulation work has been made compulsory by the energy regulations, which introduced the concept of "embedded work", i.e. the hanging of this insulation during certain rehabilitation work: 

  • renovation of the facade concerning at least 50% of the surface, excluding openings, with an exemption for notable buildings designated by Sovereign Ordinance and safeguarded sectors (in Monaco Ville and in the Vallon Sainte Dévote). Given the technical difficulties of certain projects and the additional financial costs they entail, exemptions may be granted, and alternative solutions may be found:
  • repairing the roof of more than 50% of the whole surface, excluding openings;
  • fitting out of annexes such as attics, cellars or garages in order to make them habitable.

 

 For further information, please visit the official website of the Principality's Energy Transition: transition-energetique@gouv.mc

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The range of measures, some of which are incentive-based, others mandatory, will enable the Principality to move towards a responsible society, with more moderate energy consumption, based in particular on renewable energy.

It is therefore up to all those involved in the real estate sector - architects, builders, developers, property managers - to go into action and train themselves on all measures to reduce GHG emissions and to be proactive on energy issues.

 

Valeri Agency, as a property and co-owner building manager, is concerned by this energy transition and will be able to explain the measures and help you for your projects.

Do not hesitate to contact us!