In October 2019 a stakeholder meeting took place to discuss the results of the second study of the European Smart Readiness Indicator (SRI). The studies serve to develop a European proposal for the technical design and implementation of the new policy instrument. The upcoming completion of the second study marks the start of a next phase in which member states must consider if and how they intend to introduce the Smart Readiness Indicator (SRI) into their regulations. This article provides an overview of what has happened so far and recommendations for the next steps.
What is the Smart Readiness Indicator?
The Smart Readiness Indicator (SRI) is a new (optional) policy instrument developed by the European Commission with the aim of raising more awareness about the benefits of smart building technologies. This includes, for example, technology that can help to keep the air quality in a room stable or that allows for better interoperability between technologies. The underlying idea is that by obtaining insight into the 'smart readiness' of a building, its owner, occupant or user is convinced to invest in smart technology.
What about the regulations again?
The development of a Smart Readiness Indicator (SRI) is a task of the European Commission under the revised Energy Performance of Buildings Directive (EPBD) of 2018. The task has been carried out via two studies;
- one aimed at drawing up a definition and technical design of the SRI
- the other aimed at finalising the technical design and a further elaboration of the possibilities for implementation.
At the same time, the European Commission itself is working on a draft for an Implementing Act for the SRI. This one of the requirements specified in the Energy Performance of Buildings Directive (EPBD).
An Implementing Act is a legally binding document in which conditions are laid down to ensure that European legislation is uniformly implemented. Implementing Acts are drawn up under the supervision of committees made up of representatives of Member States. The European Commission is currently working on a proposal that will be discussed with the committee. The EPBD states that the Implementing Act for the SRI should be delivered by the end of 2019, but the European Commission has indicated that this will more likely be around mid-2020.
Preconditions for a successful national implementation
As the EPBD has opted for a national implementation, national differences and possibilities will have to be taken into account. It is therefore important to bear in mind the difference between European and national implementation;
- the European task is to provide a clear understanding of the objective of the instrument and the necessary basis to ensure that, for example, the same technology does not suddenly receive more points in a neighbouring country. This can be done, for example, by a centralised supply of standardised data on the smartness of construction technologies.
- The national task is to identify the most appropriate (and therefore cost-effective) policy instrument to engage the SRI. An application of the SRI is voluntary. The Directive refers to time frame for a voluntary test phase at the national level.
In order to ensure that this national implementation is as successful as possible, it is very important that the following questions are sufficiently answered:
What added value can an SRI have for the intended end customer?
The introduction and maintenance of a label or indicator requires an investment of time and resources for methodology maintenance, expert training, a site visit for inspection, the preparation of the report, etc. This translates into a certain cost per SRI report. The maximum height of this cost is determined by the price that the end customer is willing to pay for it (in other words, the added value that the SRI delivers). For the residential market, the added value might lie more in the optimisation of comfort, while the non-residential private market may benefit more from an impact on a competitive advantage for the sales and rental market. It would be useful for the study to identify the most appropriate segmentation within the target groups for the SRI.
To what extent has the SRI been able to succeed without added value?
A stand-alone label, as suggested in the study, implies a high maintenance cost for the above mentioned reasons. If no added value can be generated from the label itself, the government will have to bear the costs of setting up and maintaining the SRI. This will certainly not be an option for all Member States. Insight into the possible added values of an SRI in order to set up an instrument that covers the costs seems therefore a prerequisite for a successful national implementation. To support the national authorities in this respect, the study should provide more insight into the possible added values per target group and the price that target groups are willing to pay for an SRI. For example, during the 'Public Beta Testing' respondents could (at least) be asked what and why they are willing to pay for an SRI.
What is the added value of the SRI as a stand-alone label?
The study examines the design of the SRI as a stand-alone labellinked to the EPC as the main track for implementation. During the stakeholder meeting it was indicated that drafting an SRI would only require one additional hour of inspection time of a EPC reporter (EPB-verslaggever in Dutch). This estimate seems optimistic. Depending on the type of building an EPC label currently costs between 90 to 200 euros in Belgium for an end consumer. These amounts include EPC training, travel time to the location, inspection, making a report, calculating the label and consulting with the end consumer. The margin to raise these prices is limited, especially due to the difficult discussions on the extension of the EPC obligation and the financing of renovations. A possible solution would be to integrate the SRI into the current EPC methodology; with or without a separate indicator.
To what extent is the focus on energy relevant for a successful SRI?
There is a strong focus on energy in the implementation of the SRI. The question is whether the complexity this entails causes the failure of the SRI to hit the mark. The impact of smart technology on the energy efficiency of a building is difficult to valorise. This requires a detailed calculation method and data per (combination of) technology(s) (and therefore an integration of the SRI into the EPB or EPC methodology). A condition is the possibility to valorise the increased impact on energy efficiency (or comfort). The original objective of the SRI, however, was to raise awareness of the potential of smart technology. The question is how this goal can be achieved in the best and a cost-effective way. The "energy" track is complex. Imposing for example an unambiguous standard or increasing recognisability at the technology level may be more effective.
Optimization usability of the report
Improved readability of the current report would support the implementation of the SRI into national regulation. An important opportunity lies in making the distinction between main and side issues more clear. For example through making a distinction between the conclusions from the stakeholder survey relevant for the study and comments from one or more stakeholders after which the comments can be placed in an annex.
Adding a description of the stakeholders makes it easier to assess the representativeness of the sample taken with regard to positions. Also certain statements could be verified more easily through a consistent citation of sources. Through these points the report can be simplified significantly and reduced in volume. More information about this can be found in the position on Agoria's SRI.
For the full position of Agoria, click here.
In November the public test rounds (the Public Beta Testing) were completed. At the same time, a public consultation ran until the end of October. A third (self-supporting) Topic Group C will be set-up with the aim to facilitate future developments of the SRI. This study is expected to be completed in June 2020 instead of 2019. The European Commission continues to work on an Implementing Act to define the definition and methodology. This will be discussed with the member states and submitted to a vote in mid-2020. A third stakeholder meeting is foreseen in 2020. To follow all developments, presentations and reports concerning the study directly, register on the study website (see 'Relevant links').