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The energy revolution becomes the business model

LISDAR is bringing together investors, architects, project developers and IT specialists in Liechtenstein for the third time. In an interview with Steffen Klatt the chairman of the congress, Peter Droege, points out how sustainability becomes a business model.

A conference in Liechtenstein is bringing together investors, architects, project developers and IT specialists
– an interview with Peter Droege

The building stock represents 40 per cent of non-renewable energy consumption. The technologies to reduce this, as well as those to capture the surplus production of solar energy, are available. Yet architects and investors alike often hesitate. A conference in Liechtenstein wants to demonstrate that sustainability is a business model.

Interview: Steffen Klatt

This winter was a gruelling test for the nuclear energy phase-out: It was very cold for a long time, consumption was high and eight nuclear power plants in Germany were taken off-line. Was the test successful?

Peter Droege: There is no reason not to pass such a tough test. Germany has exported more energy since then. When France recently took eight reactors of the grid, the country imported 7 gigawatts; Germany produces 10 gigawatts of solar power alone. Today, regions, municipalities and homeowners are striving for energy autonomy. The sustainable technologies that are needed for this can easily be implemented through a combination of energy efficiency, thermal energy such as geothermal or solar thermal, and photovoltaics. The type of energy that is required can easily be delivered through a decentralised system.

Who needs to ensure that these technologies are also implemented?

For one thing, investors and property owners. For this reason, policy – whether it comes from countries or regions or municipalities – has to also offer the right incentives. Many countries and regions are already doing this. The EU has mandated that from 2020 onwards, all new residential buildings must be able to cover most of their energy needs through renewable sources of energy.

Is the construction industry on the right path towards meeting this target?

The construction industry itself already is. The challenge lies primarily with investors and property owners on the one side, and with architects and engineers on the other. Many investors still only think about the costs of such measures. However, we are talking here about investments that bring about significant savings.

Do these investments and future savings benefit the same actors?

With new buildings the additional costs are so low in the meantime, that one can ignore them. However, one has to include energy-autonomous systems already at the beginning of the planning phase.
But renovations are something else. There, the building has to be modified. This is where costs arise, and with every individual building one has to consider how far one can pursue energy efficiency and how much to compensate with renewable energy.

With new buildings, is it simply necessary that planners, architects and engineers implement that which is already possible?

Yes, and for that they need knowledge, and they also need to be able to apply that knowledge. Some architects still not want to deal with the integration of solar systems. The consequence of this is that new buildings that are still not outfitted with solar panels can only be converted later with great difficulty.

How does one get past this mental block?

One can put their hopes in the next generation of architects. Unfortunately, many universities are still trapped in outdated patterns. Students who wish to think outside of the box have to adapt themselves to the reality of the companies for whom they work. After all, there are already quite a number of companies that specialise in this field, especially in Switzerland and Liechtenstein. But this should be something that involves the entire construction industry. We have unfortunately not yet arrived at this point.

Can conferences – such as the Liechtenstein Congress on Sustainable Development and Responsible Investing, which you organised – change this?

Planners and architects have to understand that it’s not simply about integrating solar systems into architecture. Architecture itself is in fact determined by energy. They need to understand the building from the ground up as an energy system. The entire technology is an energy technology. This is a similarly major transformation as it was 150 years ago with the Industrial Revolution.

What role do investors play?

If investors have a long-term interest, they must insist that the building not be an ‘energy guzzler’. This is already self-evident for some investors, such as Credit Suisse or Zurich Insurance Company. But others think in the short term up to now. Particularly with renovations, there has been little incentive until now.

With regard to renovations, how can present-day investment costs and future savings be brought together?

This has to be reflected in rental prices. High energy consumption should be reflected in lower rents and, conversely, higher rents for smarter use of energy. This requires the involvement of legislators, too.

Can such an incentive also be created through financial products?

There are at present service providers that offer energy services to companies. They benefit by saving on energy costs. But there are hardly any on a small-scale, such as for single family houses – except for solar roof installations.

Do the financial markets already appreciate sustainability as an opportunity?

To date, this seems to be a subject foremost for funds. But the markets themselves don’t yet appreciate sustainability as such. This is one reason why we find ourselves in a cycle where we are facing future financial crises more quickly, and this will only further increase as a result of the already perceptible peak global oil production.

How great is the interest from the financial market in Liechtenstein to search for a new direction?

Very great, and we see this in the growing number of participants from different fields. The Congress actually consists of three conferences that have different focus areas and different audiences. We anticipate that around half of the participants will attend for more than one day. We address in particular those who are searching for a new perspective and who want to look into other areas, be it in the field of finance or science. The Liechtenstein Congress is taking place now for the third time. It is a fixed institution – and it is well on its way to being recognised as the ‘Davos of sustainability’.

About the Congress:
From 2-4 May, the third Liechtenstein Congress on Sustainable Development and Responsible Investment (Lisdar) will take place at the University of Liechtenstein. Initiated and chaired by Peter Droege, the Congress brings together architects, spatial planners, investors, economists and IT specialists. The Congress is an international platform for practice-oriented research to make the shift towards a sustainable economy. The first day of the congress will focus on responsible investing and will look at the different roles of foundations, institutes and individuals. The second day will address the concept of the renewable city and its relationship with architecture, property and infrastructure. The third day will deal with sustainable business models and information systems.

Professor Peter Droege is Professor for Sustainable Spatial Development at the University of Liechtenstein. He is President of Eurosolar, the European Association for Renewable Energy.
Droege studied at the Technical University of Munich and the Massachusetts Institute of Technology and taught at the universities of Tokyo, Sydney and Newcastle. He is a founding member and General Chairman of the World Council for Renewable Energy.