Cost optimality

In the recast Energy Performance of Buildings Directive (EPBD) adopted in May 2010, a benchmarking mechanism for national energy performance requirements was introduced. The purpose of this is to determine cost-optimal levels to be used by Member States for comparing and setting these requirements.

The previous EPBD (from 2002) set out a general framework to assess the energy performance of buildings and required Member States to define maximum values for energy delivered to meet the energy demand associated with the standardised use of the building.

Cost optimal building performance requirements

New eceee report on the calculation methodology for 
reporting on national energy performance requirements
on the basis of cost optimality within the framework of 
the EPBD (2 May 2011).


In the Directive that was approved 19 May 2010, it  was clear that the 2002 Directive had shortcomings and that there was a need for further strengthening. However it did not contain requirements or guidance related to the ambition level of such requirements. As a consequence, building regulations in the various Member States have been developed by the use of different approaches (influenced by different building traditions, political processes and individual market conditions) and resulted in different ambition levels where in many cases cost optimality principles could justify higher ambitions [1].

The EPBD recast now requests that Member States shall ensure that minimum energy performance requirements for buildings are set “with a view to achieving cost-optimal levels”. The cost optimum level shall be calculated in accordance with a comparative methodology.

In May 2011 eceee presented a new report with the aim to contribute to the ongoing discussion in Europe around the details of such a methodology by describing possible details on how to calculate cost optimal levels and pointing towards important factors and effects.

The methodology described in this report is consistent with the description of the process as presented in the study “Cost Optimality – Discussing methodology and challenges within the recast Energy Performance of Buildings Directive” published in September 2010 by the Buildings Performance Institute Europe (BPIE). [2] The present document provides additional insights and details.

The following text summarizes the provisions of the EPBD recast text regarding calculating and achieving cost-optimal requirements:

Methodology to calculate cost-optimal levels

The Commission shall have established by June 2011 a comparative methodology framework for calculating cost-optimal levels of minimum energy performance requirements for buildings and building elements (e.g. the roof of a building). The comparative methodology framework shall require Member States to:

  • Define reference buildings that are characterized by and representative for their functionality and climate conditions. The reference buildings shall cover residential and non-residential buildings, both new and existing ones;
  • Define energy efficiency measures that are assessed for the reference buildings. These may be measures for buildings as a whole, for building elements, or for a combination of building elements;
  • Assess the final and primary energy need of the reference buildings and the reference buildings with the defined energy efficiency measures applied. Related calculations should be based on relevant European standards; and
  • Calculate the costs (i.e. the net present value) of the energy efficiency measures during the expected economic life cycle applied to the reference buildings, taking into account investment costs, maintenance and operating costs, earnings from energy produced and disposal costs.

Assessment and comparison to current standards

With the methodology being supplied by the European Commission, the assessment of input data (e.g. climate conditions, investment costs etc.) and the calculation of the results is done by and on the level of individual Member States. However joint issues like information regarding estimated long-term energy price developments are to be provided by the European Commission. By using this common methodology, the Member States identify cost-optimal levels of minimum energy performance requirements for new and existing buildings and building elements and compare the results of these calculations to the minimum energy performance requirements in force.

Member States are requested to report to the Commission all input data and assumptions used for these calculations and the results of the calculations. Member States need to submit their reports to the Commission at regular intervals of maximum five years, with the first report due by June 2012. If the result of the benchmarking performed shows that the minimum energy performance requirements in force are significantly less energy efficient than cost-optimal levels of minimum energy performance requirements (i.e. exceeding 15%), the Member State needs to explain this difference. In case the gap cannot be justified, a plan needs to be developed by the respective Member State, outlining appropriate steps to significantly reduce the gap by the next review of the energy performance requirements. The Commission will publish a report on the progress of the Member States regarding cost-optimal levels of minimum energy performance requirements.

In the report, the outline of a possible methodology for calculating and comparing the cost of different packages of energy-related measures when applied to new or existing buildings or building elements is described.

Download report here
See also BPIE's brochure on cost optimality (to be found under the documents page)

[1] See e.g. “U-values for better energy performance of buildings”, report for EURIMA-European Insulation Manufacturers Association, Ecofys 2007