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IEA (2020), Energy Efficient Buildings in Armenia: A Roadmap, IEA, Paris https://, Licence: CC BY 4.0
Energy-efficient technologies and materials can be widely deployed given, among other conditions, the right governance and policy environments, functioning markets and access to financing. This section explores approaches to expand the deployment of energy-efficient technologies in Armenia''s buildings, beginning with envelopes and whole-building retrofits. It provides insights and recommendations, including for cooling, which is one of the fastest-growing sources of energy consumption both in Armenia and globally.
Armenia faces significant obstacles to comprehensively retrofitting entire buildings including their envelopes (i.e. external walls, insulation, windows, doors, etc.), particularly for the many MABs in cities such as Yerevan. Due to the poor condition of many buildings, basic structural repairs may be needed before an energy efficiency intervention is logical or feasible (Econoler, 2015).
Armenia is not alone in the challenge of scaling up and replicating building efficiency retrofits. While many individual projects have proven the cost-effectiveness of "deep" building renovations,most countries are not at the stage at which these kinds of retrofits are commonplace.
In addition to technical and structural challenges – and market and financial barriers – successful energy efficiency interventions in whole buildings can involve a long list of stakeholders, including the owners of the buildings and/or individual apartments, installers and lenders. Ensuring that all these stakeholders work together on one or more whole-building efficiency projects is not always easy.
In Armenia, stakeholders involved in achieving whole-building retrofits include households (e.g. apartment owners and tenants); HOAs and HMCs; suppliers and installers (including energy auditors and other professionals); LFIs and IFIs; local governments; and energy providers.
Despite the complexities involved, envelope improvements and partial building retrofits are achievable through targeted engagement with key stakeholders, as illustrated by the REELIH project. In addition, nearly half of Armenia''s housing stock was built during 1951‑75 and 40% was constructed between 1976 and 1995. Only a small portion (around 7%) was constructed following the mid-1990s (EDRC, 2015). This suggests there may be potential to scale up and replicate structural repair programmes and/or envelope efficiency improvements systematically for many buildings of similar age and characteristics (i.e. construction profile).
One initiative that has employed precisely this kind of programmatic approach to building efficiency retrofits (including exterior wall improvements) is known as Energiesprong. Using prefabricated facades, carefully selected and efficient heating and cooling equipment, and insulated and solar photovoltaic (PV)-equipped roofing materials, Energiesprong has demonstrated the feasibility of retrofitting entire neighbourhoods at one time rather than targeting buildings individually (Energiesprong, 2020).
Given the differences in economic indicators, condition and type of buildings, etc., between Armenia and the Netherlands (or other EU countries and US states), policy makers may question whether the Energiesprong approach is feasible for Armenia. While specific technologies and methods would likely differ given Armenia''s local requirements, some of the Energiesprong model''s non-technological aspects may be relevant.
One of these is the business model itself, which is based on a repayment scheme wherein homeowners do not incur additional or upfront costs. Instead, the refurbishment cost is paid over a 30-year period through lower energy bills, factoring in budgets for planned maintenance and repairs. The model also works through HOAs, with homeowners paying Energiesprong via their HOA through a service charge that is equivalent to their regular payments for energy, maintenance and repairs (Energiesprong, 2020).
Including maintenance and repair in a residential building-efficiency business model may be particularly advantageous for Armenia. A repayment model based solely on energy savings – even over a long time period – would likely be insufficient to cover the potentially significant repair and refurbishment costs of the country''s buildings. Integrating efficiency investments with the estimated USD 200 million Armenia spends annually on the upkeep of public buildings and social housing could be doubly beneficial.
Based on R2E2 estimates, the incremental cost of achieving a significant (up to 50%) efficiency improvement as part of comprehensive public building refurbishment is between USD 17 and USD 20 per m2. This is approximately 10% of the average USD 200 per m2 required for comprehensive rehabilitation of a public building in Armenia (Econoler, 2015).
Armenia has already shown leadership in stimulating local markets and supply chains as part of the R2E2 project targeting public buildings. This project provides a proof of concept for the creation of a local ESCO market in Armenia, driven by demand for energy efficiency improvements in a large number of buildings.
A renewed investment campaign initially targeting public buildings could eventually create demand for similar systematic retrofits of the many thousands of residential dwellings in Armenia. Indeed, this is precisely the focus of an ongoing United Nations Development Programme (UNDP) and Green Climate Fund (GCF) project that seeks to "reduce the overall investment risk profile of energy efficiency building retrofits to encourage private sector investment and reduce fuel poverty" (UNDP, 2016).
Heating is a central issue in Armenia''s building efficiency discussions. Due to the length of the heating season and the severity of winter, particularly in certain rural parts of the country, heating (for space heating and hot water) accounts for the majority of energy consumption in Armenia''s buildings. Heating also has important fuel poverty, health and wellbeing implications. Of 2500 households surveyed across Armenia in 2015, less than 40% claimed to be "comfortable" in winter, while nearly half are merely "close to comfortable" and more than 9% said they "hardly cope". The survey results indicate that discomfort due to insufficiently heated homes is more prevalent in villages, and in cities and towns other than Yerevan (EDRC, 2015).
Historical circumstances are partly to blame for this relatively high incidence of underheating. While 90% of MABs and public buildings relied on district heating networks or central heating during the Soviet era, after its collapse central systems were almost entirely replaced by individual installations such as gas-fired boilers and heaters, particularly in MABs (UNDP, 2020). Meanwhile, households in villages continue to heat their homes primarily with homemade stoves that burn wood or other forms of biomass. Strong reliance on individual heating systems that combust fossil fuels or biomass means Armenians are highly exposed to the risks associated with gas price fluctuations, and with biomass cost and availability.
Given the situation, a mixture of policies and efforts will be required to increase the efficiency, performance and affordability of heating technologies in Armenia. (Re)constructing district, co generationor central heating systems is clearly one option, particularly for MABs in which the underlying infrastructure for these systems is still viable. As part of a UNDP-funded project, 76 MABs in Yerevan (Avan district) have been connected to a modern co generation facility since 2010. The initiative has proven successful, as it provides better heating for residents while cutting average heating costs by 20% compared with individual gas heaters (UNDP, 2015a).
Beyond technical feasibility considerations, expanding district heating and co generation installations will also require that policy makers address a range of barriers, including weak regulatory frameworks, a lack of incentives to commercialise existing district heating operators and lack of capacity among market participants, notably MAB management associations (UNDP, 2012).
When district-level or central heating strategies are not feasible or economical (e.g. in village homes), policy makers may need to consider other ways to deploy efficient technologies. A bulk procurement approach (as outlined in the section on lighting) may be an option for technologies such as condensing boilers. Programmatic initiatives such as Energiesprong (discussed above) may also be worth exploring, as efficient heating technology installations are generally included in this type of retrofit package.
New Zealand''s experiences may also be relevant. To address fuel poverty concerns in low-income households, since 2009 the government in Auckland has been working on a series of energy efficiency grant programmes that provide insulation retrofits as well as heating upgrades. Warmer Kiwi Homes, as the programme is now known, has provided both energy savings as well as measurable improvements in the health of building occupants (IEA, 2020b).
Furthermore, beyond "pure" efficiency technologies, Armenia has significant potential to integrate renewable energy with energy efficiency, notably through geothermal heat pumps and solar thermal water heaters. For instance, Armenia''s 2011 Renewable Energy Roadmap estimates that geothermal heat pumps could provide more than 4 terawatt hours (TWh) of capacity annually, which is nearly four times Armenia''s current heat generation based on natural gas and oil (Econoler, 2015; IEA, 2015). While geothermal heat pumps are currently at the testing and pilot stage only, solar thermal has been identified as one of Armenia''s most feasible sustainable energy technologies, and local market growth has exceeded expectations.
Although renewable heating and renewable energy and are not the focus of this roadmap, these important subjects intersect with building-efficiency policy development – especially in relation to NZEBs (Energy Charter, 2020). Heating is therefore likely to remain a central topic for Armenia''s policy makers during NEEAP deliberations and for the implementation of standards and labels for key technologies such as boilers and heat pumps.
Unlike heating, cooling is still responsible for only a relatively small portion of overall energy demand in Armenia. Only 5% of Armenian households have an AC unit, although the figure is higher in Yerevan at just over 10% (EDRC, 2015). However, cooling is one of the fastest-growing sources of Armenian energy demand, mirroring a global trend resulting from climate change-induced average temperatures increases (IEA 2020b).
Average annual temperatures in Armenia are expected to rise by up to 2.2°C by 2050 (USAID, 2017). In addition, most Armenian cities are in the country''s "moderate" and "warm" climate areas (EDRC, 2015). With greater population density in cities and urban heat-island effects, it is likely that demand for AC units and other cooling technologies such as fans will increase further, particularly among Armenia''s city dwellers during summer heat waves.
For policy makers working on cooling in Armenia and the world at large, a key consideration for regulation is the average efficiency of AC units available on the market. As discussed above, EESL programmes are likely to be critical tools, particularly since consumers in most markets are buying AC units that perform at well below their energy efficiency potential.
One strategy that is being used to address this problem in at least 25 countries, including India and China, is the development of national cooling action plans that feature timetables for the adoption of MEPS and labelling programmes (among other measures), in parallel with efforts to phase out harmful refrigerants (K-CEP, 2019; K-CEP, 2019a). Development of Armenia''s second NEEAP could be a unique and timely opportunity to include cooling-related measures in an overarching efficiency strategy.
A key first step to develop any cooling action plan – whether as a standalone plan or part of NEEAP-3 – is data collection. Having accurate and comprehensive information about energy-consuming technologies is critical to formulate effective policies and programmes, notably MEPS and labels. For cooling, policy makers need details about the efficiency performance of AC units and other equipment being sold to consumers in order to establish minimum standards or improvement targets for manufacturers; to develop labelling schemes; and to create incentives to help consumers access the most efficient models.
A number of organisations, including Sustainable Energy for All (SEforALL) and the Kigali Cooling Efficiency Program (K-CEP) are working with countries across the globe to develop both policy approaches and financing instruments, including awards and prizes, to balance efficiency with affordability (SEforALL, 2020). These sustainable cooling efforts are also closely linked with two major ongoing global initiatives: the phaseout of harmful refrigerants (part of the Montreal Protocol on Substances that Deplete the Ozone Layer in support of the Kigali Amendment) and efforts to meet the climate-related goals of the Paris Agreement through the Nationally Determined Contributions (NDCs) being submitted by parties to the United Nations Framework Convention on Climate Change (UNFCCC).
Innovative leasing programmes could also promote efficient cooling in commercial and public buildings. For example, the government of Rwanda has launched a "Coolease" mechanism based on the principle of cooling as a service (CaaS), whereby technology providers offer cooling on a leasing or pay-as-you-go basis, essentially using an ESCO model (SEforALL, 2019). The success of the R2E2 project''s use of ESCOs for public buildings suggests that this kind of approach could be effectively deployed in Armenia.
In the residential setting, a new initiative in Ghana and Senegal also offers potential inspiration for policy makers in Armenia. Through collaboration with local banks and vendors, and with funding from K-CEP as well as participating governments, the initiative aims to establish a financing mechanism to replace thousands of old, inefficient refrigerators and AC units. Building on a successful refrigerator scheme previously deployed in Ghana (see the section on appliances and energy-using devices below), the initiative features a recycling scheme with incentives for households to trade in their old devices (Ghana News Agency, 2020).
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