Renovating building groups in the Mediterranean climate: cost-effectiveness of renewable-based heating alternatives in the Italian context

Citation: Blázquez, T.; Dalla Mora, T.; Ferrari, S.; Romagnoni, P.; Teso, L.; Zagarella, F. Renovating Building Groups in the Mediterranean Climate: Cost-Effectiveness of Renewable-Based Heating Alternatives in the Italian Context. Sustainability 2022,14, 12303. https://doi.org/10.3390/ su141912303 Academic Editor: Antonio Messineo Received: 5 August 2022 Accepted: 14 September 2022 Published: 27 September 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). sustainability Article Renovating Building Groups in the Mediterranean Climate: Cost-Effectiveness of Renewable-Based Heating Alternatives in the Italian Context Teresa Blázquez 1, Tiziano Dalla Mora 2, Simone Ferrari 1, Piercarlo Romagnoni 2, Lorenzo Teso 2,* and Federica Zagarella 1 1Department of Architecture, Built Environment and Construction Engineering (ABC), Politecnico di Milano, 20133 Milano, Italy 2Department of Architecture and Arts, UniversitàIUAV di Venezia, 30135 Venezia, Italy *Correspondence: [email protected] Abstract: District level approaches for the renovation of the building stock boost the implementation of energy efficiency measures (EEMs), taking advantage of the economies of scale. International Energy Agency Annex 75 aims to assess the cost-effectiveness of renovation strategies at the district level, combining EEMs and renewable energy sources. For this goal, a building energy model is simulated with the Energy Plus dynamic calculation engine for assessing the generic district of the Italian case study, representing the residential stock from 1960 to 1980, placed in two prevailing space-heating dominated climates; then, a cost-effectiveness evaluation of each scenario is conducted to support stakeholders’ decision making. In particular, envelope insulation is cost-effective only in northern zones, while new decentralized thermal systems are not convenient in any case with current envelopes. Once the envelopes are insulated, decentralized low-temperature air-to-water heat pumps with PV can cover all of the buildings’ energy needs, even implying a small increase in annual costs. The switch to district net scenarios is cost-effective only if coupled with PV. A rise in energy prices brings PV-based strategies under a 10-year PBT, except for solar thermal DH in northern areas, as well as non-PV-based options such as low-temperature HPs or biomass-fuelled DH in warmer and colder zones, respectively. Keywords: cost-effective strategies; building renovation scenarios; renewables in buildings; generic district; energy efficiency measures; district heating; Mediterranean climate; Italian housing context 1. Introduction The building sector is the single largest energy consumer in the European Union (EU), and one of the greatest carbon dioxide emitters. Buildings in the EU are responsible for 40% of global energy consumption and 36% of greenhouse gas emissions, which mainly stem from construction, usage, renovation, and demolition [ 1 ]. This important energy use arises from the existence of more than 100 M residential buildings in the EU building sector, which account for only a 3% share of A-label performance examples [ 2 ]. Moreover, 75% of this stock is inefficient from an energy perspective, and recent estimations acknowledge that 75–90% of these buildings will still stand in 2050 [3]. Consequently, the building sector offers great potential for achieving energy efficiency aims. Most buildings in the EU should be renovated for energy efficiency if a decarbonized building stock is targeted by 2050. Indeed, building renovation rates are set at an annual rate of 1% [ 4 ], which poses faster and deeper energy efficiency renovation of buildings as a crucial challenge for Europe in reaching 2050 carbon-neutral goals [5]. In Italy, where natural gas is a very popular source for domestic heating [ 6 ], the residential building stock covers 28% of total national energy consumption, with 86% of these buildings having been built before 1990 [ 7 , 8 ]. Recent studies suggest that 41% of savings Sustainability 2022,14, 12303. https://doi.org/10.3390/su141912303 https://www.mdpi.com/journal/sustainability Sustainability 2022,14, 12303 2 of 20 on natural gas consumption can be achieved in 2030 with respect to “business-as-usual” estimations, provided 28% of all existing flats undergo energy efficiency renovations [ 9 ]. These evaluations are calculated on a heating degree days (HDDs) model basis, stressing the high correlation of energy consumption to the contextual heat severity [ 10 ], particularly in the Italian country, which depicts a wide climate variability [ 11 ]. A recent study on the financial feasibility of interventions in terms of risk/returns highlights that in the face of uncertain market scenarios within the current post-crisis recovery, investing in resilient building models implies reinforcing the energy efficiency and comfort standards of existing stocks located in urbanized areas rather than building new properties on the city outskirts that lack a proper built-up infrastructure [12]. From the establishment of the first directives on the energy efficiency of buildings [ 13 ], mandatory requirements agreed upon within EU member states (MSs) are being continuously revised and updated to adapt to technical advances in the construction sector. So far, 70% of MS have transposed these directives into action plans to finance building renovation, such as Italy [ 14 ]. This being the case, 2010 was the first time that EU regulations included the concept of the nearly zero energy building (i.e., named after the acronym nZEB), leaving each country to freely promote the transition towards nearly zero energy scenarios. The nZEB definition dictates that part of building needs should be compensated by passive strategies adapted to the local context, and that remaining energy demands should be covered by renewable energy sources (RESs). As a result, different strategies may be accounted for in different national contexts attending to local building stock features and policies and available RESs [15]. Within the Energy in Buildings and Communities Programme (EBC) managed by the International Energy Agency (IEA), Annex 56 (Cost-Effective Energy and Carbon Emissions Optimization in Building Renovation project [ 16 ]) set a methodological precedent at the building scale to the following Annex 75 (Cost-effective Building Renovation at District Level Combining Energy Efficiency and Renewables project [ 17 ]), which aimed to investigate cost-effective strategies for reducing greenhouse gas (GHG) emissions and energy use in buildings at a district level, combining both energy efficiency measures (EEMs) and renewable energy measures. The objective is to provide guidance to policy makers, companies working in the field of energy transition, and building owners in order to cost-effectively transform the city’s energy use in the existing building stock towards low-emission and low-energy solutions. Combined with other studies [ 18 ], the outcomes of this study [ 17 ] supported large-scale approaches for increasing the renovation rate of existing buildings from 1–2% to 2–3% per year by 2025 [ 19 ], taking advantage of economies of scale to reach energy efficiency goals [3]. In recent years, there has been considerable research into cost-effective assessments of measures carried out to improve the building stock towards more energy-efficient and decarbonized scenarios. Teni et al. [ 20 ] state that the building technology by construction period impacts both the energy performance and economic feasibility of interventions. The study depicts that acting on very old buildings—i.e., built before 1956—demonstrates longer investment returns than the buildings’ predicted service life, which brings into debate the usefulness of renovations. On the contrary, the building stock from the seventies offers greater potential for energy improvement since these buildings often present the worst performance. In agreement with other recent research, the authors state that technological development, energy price variations, and interest rates need to be considered in studies to enhance decision-making plans on large scales. Toleikyte et al. [ 21 ] ran another study in Lithuania, reporting the need for financial incentives to boost the renovation of lowperformance residential buildings and the need for a national standard regulation in line with the energy savings potential of this building stock towards 2030. Overall, the integration of RES covering a high share of domestic energy demands is seen as an essential step towards the mitigation of CO 2 emissions and the achievement of urban decarbonized scenarios. A study on a social housing complex from 1949 in Denmark, whose aim was to accelerate stock renovations towards NZEB standards, presents a Sustainability 2022,14, 12303 3 of 20 decision-making methodology supporting the selection of retrofit interventions in buildings [ 22 ], based on a previously defined cost-effectiveness parameter (CEP) that couples primary energy savings, renovation costs, and a lifetime of each renovation measure. This study was replicated in Switzerland [ 23 ]. These studies prove the CEP as useful for estimating optimal packages of interventions and conclude that implementing RES is proven cheaper than doing no renovations, with heat pumps representing the most favourable system to achieve NZEB standards. Research conducted in two case studies in Switzerland argues that, differently from common assumptions, the most cost-effective solution in buildings with low or high energy demand should imply the replacement of the existing heating system with biomass ones to decrease the GHG emissions, together with intervening over the building envelope in the worst cases [ 24 ]. The study considered the building’s operation in future scenarios (i.e., climate change, material replacement, electricity mix, and occupancy behaviour) and cases related to the production of materials (i.e., life cycle assessment). However, the number of uncertainties within the definition of the research nudges the authors to state that further studies on a bigger range of energy sources, dynamic simulation tests, and more indicators for climate change scenarios would increase the robustness of results. A study on a cooperative housing neighbourhood in Norway displayed similar results [ 25 ]. By applying the method of [ 17 ], they suggest that a performing solution could include the replacement of existing windows, PV integration, and the renovation of the existing DH network fuelled by waste incineration. However, this result is superseded by the assumption that no GHG emissions are allocated to the heat production for the DH network; otherwise, this action will produce the highest emissions. Results show that the choice of different supply systems does not impact the cost-effectiveness of energy efficiency measures, but it does impact GHG emissions, highlighting the need for combined energy and environmental approaches, even if embodied emissions are considered. A very popular solution for a more energy-efficient building sector is the implementation of district thermal systems (DTSs), which can compensate for space heating (SH), space cooling (SC), and domestic hot water (DHW) demands of buildings through a centralized approach. These technologies are more developed in Central, Eastern, and Northern Europe since they were first devoted to offset heating and DHW. However, they are becoming more and more popular in Mediterranean countries, such as Italy, where district heating covers 3% of the total share of SH which raises to 61% [ 26 ] and is expected to increase about 50% to 80% towards 2050. A review on the potentialities of DTS (i.e., heating and cooling) is reported in [ 27 ]. Alternative technologies that are under experimentation in Mediterranean countries are reported in [ 28 , 29 ]. DTSs present many advantages regarding the energy and thermal supply to large assets of buildings or neighbourhoods since they can integrate different RES (e.g., biomass, electricity, geothermal), can operate at low temperatures reducing CO 2 emissions [ 30 , 31 ], and can be coupled with energy storage systems to stabilize demand and supply of the network [32,33]. Framed within the southern partners of Annex 75, [ 34 ] presents a practical validation of the proposed methodology over a Portuguese case-study neighbourhood, showing that despite being uncommon in Mediterranean areas, centralised solutions are cost-effective and energy-efficient, reducing GHG emissions and enabling the integration of RES. Nevertheless, the reported case was settled in a southern region where heating demands are not as important as that of Northern areas, concluding that further research in different climatic contexts was needed to contrast a wider range of scenarios. The authors also pointed out the importance of considering future variations in energy prices at the national level. The choice of building renovation alternatives is not always straightforward, as several researchers report on the complexity of addressing different socio-economical contexts [ 35 , 36 ]. Many countries set in force the extent to which RES should cover minimum requirements, as is the case of Italy and Portugal, in which 50% of DHW production for new buildings must be supported by solar thermal systems [35]. Other related works on the building stock have been found in Mediterranean contexts. In Italy, [ 37 ] discloses a comparative study between dynamic and quasi-steady-state meth- Sustainability 2022,14, 12303 4 of 20 ods for estimating the energy consumption at the district scale, taking a social housing district in Venice as a case study, representative of historical housing buildings in the country. Authors argue that even if the simplest tool can give accurate results of energy demand estimation at the building level, it still presents a performance gap at greater extents compared to dynamic simulation tools, which are more complex and account for more parameters in the energy balance. Ref. [ 38 ] presents an LCC assessment of the renovation of a reference building from the Italian public housing stock dated back to the 1960s–1970s. By using the NSGA-II method (fast elitist non-dominated sorting genetic algorithm), a multi-objective assessment with forty-one alternatives for energy efficiency measures on the envelope and thermal systems in more than 3000 combinations under two different climatic scenarios (“cold climate” with 3959 HDDs and “warm climate” with 899 HDDs) was used to reach technical-economical optimization. Authors conclude that optimal solutions are achieved with more efficient system plants rather than with energy efficiency measures on building envelopes, highlighting the renewable-integrated solution with heat pumps, and with PV generator as the most convenient in both climate contexts. Following [ 13 ], Guardigli et al. [ 39 ] develop a cost-optimal assessment of nZEB renovation strategies through a decision support system (DSS) to be applied over large publicly owned housing stocks, considering the net present value (NPV); the global cost (GC) at 10-, 20- and 30-year periods; and the building energy performance index (EP). The authors insist on the necessity of integrating local RES such as roof-integrated PV systems, to reach zero-net energy goals. Moreover, they highlight the expected increases in energy costs and the length of the study period for accurate predictions. Ferrari et al. [ 40 ] propose a method to assess housing buildings through energy performance indexes based on monitored consumption data normalized through the degree-day (DD) method. The method is applied to North-Italian public social housing assets dated from 1940 to 1993, but the authors state that the method is replicable in any other context provided that the consumption data of the buildings are available. In Portugal, [ 41 ] presents a method combining the life cycle cost assessment (LCC) and a life cycle assessment (LCA) of the renovation of a social housing building in Braga (Portugal). Authors point out that despite the energy convenience of the integration of RES, the consideration of embodied energy can hinder the aimed reductions in CO 2 emissions in a whole life-cycle approach (mainly when it regards PV and solar thermal), highlighting the importance of different energy mixes adapted for different contexts, and likewise for other researchers [ 42 , 43 ]. Large-scale building renovation has also been addressed by Blázquez et al. [ 44 ] in southern Spain, where standard upgrading actions—thermal insulation, windows replacement, increased airtightness, and mechanical ventilation—are tested on the social housing stock dated back to 1950–1980 in Córdoba to foresee the achievable reductions in CO 2 emissions at the urban scale. The results are transposed to a GIS platform addressed to stakeholders involved in the decision-making process to take actions on the renovation of the building stock by prioritizing the most vulnerable areas in the city [ 45 ]. Refs. [ 46 , 47 ] present studies on the importance of the optimal insulation thickness in buildings’ renovation in hot, temperate, and cold Mediterranean contexts in Spain, relying on a building energy model (BEM) representative of the built stock before 1980. In both studies, the authors place the BEMs all around the main capitals of the country under different climate zones, and state that NZEBs standards are achievable through 67 of 576 proposed energy renovation solutions. Again in Spain, the authors of [ 48 ] run an LCC study over a 30-year period on a pilot apartment building in a mild Mediterranean climate, built in 1979 in the city of Castellón. Authors define a package of optimal solutions (POS) to renovate the building, involving the building façade, windows, roof, slabs, ventilation system, infiltration improvement, thermal bridges, and domestic hot water production, providing for almost 60% primary energy savings. They also insist on the need to conduct further studies based on step-by-step interventions following private owners’ way of proceeding. So far, the identified examples in the literature on the assessment of building renovation strategies are supported by archetype energy models that are assessed at the building Sustainability 2022,14, 12303 5 of 20 scale. Commonly, these studies declare that the obtained results can be extrapolated to larger scales (e.g., district, neighbourhood, urban, and national) based on simplified building models that broadly represent the existing constructive typologies throughout national building stocks. However, the direct extrapolation of building-scale results to district-scale approaches may bias the outcome when it regards the performance assessment of netbased systems (such as a DTS connecting several buildings) or when considering common expenses within the investment of a community. In line with this, the present work aims to contribute to this research gap, by presenting an original approach at a district scale that stems from the IEA Annex 75 project, based on a generic district that arises as representative of the widely diffused housing stock from 1960 to 1980 in Italy. A set of upgrading scenarios combining energy efficiency measures (EEMs) on building envelopes and thermal systems, including centralized (i.e., district heating) and decentralized ones, is assessed in terms of primary energy consumption and annual costs. The outcomes of the present research have a twofold aim: to evaluate the costeffectiveness of implementing these measures from the point of view of private investors, and to provide guidance to policymakers, companies working in the field of the energy transition, and building owners, with the aim of upgrading the Italian existing building stock in a cost-effective way towards low-energy solutions and related emissions, with a focus on convenient strategies for the European Mediterranean area. The remainder of this paper is structured as follows. Section 2presents the methods carried out for the generation of generic district BEMs, the definition of renovation scenarios, and the cost assessment; Section 3presents the main outputs of the research in terms of energy performance and cost-effectiveness of measures; and Section 4discusses the main conclusions. 2. Materials and Methods As already declared in the introduction, the present paper was framed in the Annex 75 project [ 17 ], specifically within the subtask B—work-package 1, which aimed to develop a method which can identify cost-effective strategies for urban district renovation and support decision-makers on the evaluation of the efficiency, impacts, cost-effectiveness, and acceptance of such actions. The proposed method was applied through a set of calculations of the so-called “generic districts”, which are considered the most representative district-scale archetypes of the existing housing stock of a country. According to the methodology report [ 34 , 49 ], “generic districts” are intended as existing or fictional urban districts, defined based on typical building typologies and district sizes in the participant countries. Starting from a reference case, a set of energy scenarios was tested on the generic district to assess their potential cost-effectiveness in terms of energy, environmental, and economic impacts. Regarding the contribution of the Italian research group, the generic district was defined based on the analysis of the prevailing typologies of buildings in Italy [ 50 ]. The Italian fictional urban district is made up of 10 multi-family buildings with representative features of the existing 1960–1980 building stock, likely managed by a single entity. To assess the district’s hourly energy profiles of SH and SC, DHW, and electricity demands, a BEM representative of each building of the generic district was defined and simulated with the tool DesignBuilder (v.6.1.0.6) [ 51 ], with an Energy+ dynamic calculation engine [ 52 ]. Hence, all the buildings that compose the generic district share the same geometry as a common approach that was usually followed in the construction period to which they belong. Following [ 17 ], to assess the performance of the generic district under a broader climatic context, the BEM was located in three Italian cities (i.e., Milan, Rome, and Palermo) with different climate zones. The present article only reports the elaborations for the two case studies that can be compared in terms of renovation actions, placed in Milan and Rome, to narrow down the national climatic context to SH-dominated climates. Sustainability 2022,14, 12303 6 of 20 According to the methodology of [ 17 ], the generic district is subjected to upgrading through a set of hypothetical retrofit scenarios. Starting from a Reference case (prior-to- retrofit state), a first action, named the Anyway measures scenario, involves extraordinary maintenance measures on the envelope and the common maintenance of the systems— detailed further in Section 2.2. Then, a twofold approach to upgrade the generic district through EEMs considers: (i) actions addressed to retrofit the buildings’ envelopes, named Envelope EEM scenarios, and (ii) actions addressed to retrofit the buildings’ thermal systems, named Thermal system EEM scenarios. According to the IEA Annex 75 methodology, in this paper, the thermal systems options were named “individual” if each flat has a different supply unit, “decentralized” if each building has a different supply unit, and “centralized” if the entire district has one supply unit. In addition to these, the integration of PV systems was also investigated for the cases in which renewable-based technologies were implemented, as a closing step under the so-called PV system scenarios. To provide feasible district renovation solutions in Italy and account for the related effects, the different scenarios were compared from a cost-optimality perspective. For this purpose, the related primary energy consumption and annual costs were calculated. Moreover, the NPV of the defined scenarios was estimated to assess the related payback time (PBT). 2.1. Reference Case The buildings of the generic district have a rectangular plan (12.40 m × 40.00 m) and four heated floors over an unheated basement (e.g., cellars, garages, warehouses, etc.). Each floor hosts 6 housing units; thus, each building accounts for a total of 24 dwellings with an average surface of 80 m2each. Two unheated stairwells serve 3 flats per floor. As already mentioned, the BEM is located in two Italian cities placed in two different climatic zones according to the national classification [ 53 ]. The first is Milan (MI), in zone E with 2404 HDDs—with hot and humid summers, very cold winters, and occasional cloudiness all year round, as well as temperature fluctuations from − 1 ◦ C to 30 ◦ C, rarely falling below − 5 ◦ C or rising above 33 ◦ C –. The second is Rome (RO), in zone D with 1415 HDDs—with warm, dry, and mostly clear summers; long, cold, wet, and partly cloudy winters; and temperature variations between 3 ◦ C and 31 ◦ C, rarely dropping below −2◦C or rising above 35 ◦ C –. According to the Köppen–Geiger classification, these climate zones can be associated with a Cfa—warm temperate climate and a Csa—dry summer climate, respectively [54]. Finally, to account for the random orientation of buildings in urban contexts, changes in the exposure of the BEM were simulated via rotation, and the average result of the performed simulations was considered. A 3D view and the geometry features of a multi-family building composing the generic district are reported in Figure 1and Table 1, respectively. Sustainability2022,14,123037of22   Figure1.Three‐dimensionalviewofamulti‐familybuildingcomposingthegenericdistrict. Table1.Geometryfeaturesofamulti‐familybuildingcomposingthegenericdistrict. Feature(u.m.)Value Gross‐heatedfloorarea(m 2 )1616 Heatedvolume(m 3 )4850 Façadearea(m 2 )1258 Roofarea(m 2 )496 Meanwindowareaperfaçade(m 2 )37 2.1.1.Occupation,ElectricLoads,andVentilation Internalheatloadsandtherelatedtimeschedulesweredefinedaccordingtothe standardISO17772(part1:2017),whichbelongstothepackageof91technicalstandards andreportsconcerningthecalculationoftheenergyperformanceofbuildings.Accordingly,differentschedulesforworkingdaysandweekendswereadopted. Indetail,anominalpowerofheatloadduetooccupantsof2.80W/m 2 andanoccupationrateof0.04peoplepersquaremeterwereconsidered.Moreover,anominalpower ofheatloadduetotheequipmentof2.40W/m 2 andduetotheartificiallightingof1.65 W/m 2 wereconsidered.Hence,ameandailyinternalheatloadforoccupants,equipment, andartificiallightingof4.50W/m 2 wasused.Airchangesperhour(ACH)wereassociated withthenumberofoccupants,accountingforameandailyACHof0.47h −1 .Infiltration rateswerekeptconstantat0.2h −1 . Unconditionedspacesweremodelledasbufferspacesclosetotheair‐conditioned areas.Fortheverticalunconditionedcores(i.e.,stairwells),internalheatloadsaccounted exclusivelyforartificiallighting,andthereforeaglobalratedensityof1.5W/m 2 wasconsidered. ForSH,acomforttemperatureof20°Cwithanattenuationof18°Cwassetinthe periodsdefinedbythenationalregulation[53],i.e.,fromOctober15thtoApril15thforno morethan14hperdayinMilan,andfromNovember1sttoApril15thfornomorethan 12hperdayinRome.RegardingtheSC,acomforttemperatureof26°Cwithanattenuationof28°Cwassetfortherestoftheyear. 2.1.2.BuildingConstructionCharacteristics TheBEMscomposingthegenericdistrictsinMilanandRomeadoptedtypicalconstructioncharacteristicsinthe1960–1980period.Verticalelementsweremodelledwith uninsulatedexternalcavitywallsmadeofhollowbricksandfinishedwithplasterand Figure 1. Three-dimensional view of a multi-family building composing the generic district. Sustainability 2022,14, 12303 7 of 20 Table 1. Geometry features of a multi-family building composing the generic district. Feature (u.m.) Value Gross-heated floor area (m2)1616 Heated volume (m3)4850 Façade area (m2)1258 Roof area (m2)496 Mean window area per façade (m2)37 2.1.1. Occupation, Electric Loads, and Ventilation Internal heat loads and the related time schedules were defined according to the standard ISO 17772 (part 1: 2017), which belongs to the package of 91 technical standards and reports concerning the calculation of the energy performance of buildings. Accordingly, different schedules for working days and weekends were adopted. In detail, a nominal power of heat load due to occupants of 2.80 W/m 2 and an occupation rate of 0.04 people per square meter were considered. Moreover, a nominal power of heat load due to the equipment of 2.40 W/m 2 and due to the artificial lighting of 1.65 W/m 2 were considered. Hence, a mean daily internal heat load for occupants, equipment, and artificial lighting of 4.50 W/m 2 was used. Air changes per hour (ACH) were associated with the number of occupants, accounting for a mean daily ACH of 0.47 h−1. Infiltration rates were kept constant at 0.2 h−1. Unconditioned spaces were modelled as buffer spaces close to the air-conditioned areas. For the vertical unconditioned cores (i.e., stairwells), internal heat loads accounted exclusively for artificial lighting, and therefore a global rate density of 1.5 W/m 2 was considered. For SH, a comfort temperature of 20 ◦ C with an attenuation of 18 ◦ C was set in the periods defined by the national regulation [ 53 ], i.e., from October 15th to April 15th for no more than 14 h per day in Milan, and from November 1st to April 15th for no more than 12 h per day in Rome. Regarding the SC, a comfort temperature of 26 ◦ C with an attenuation of 28 ◦C was set for the rest of the year. 2.1.2. Building Construction Characteristics The BEMs composing the generic districts in Milan and Rome adopted typical construction characteristics in the 1960–1980 period. Vertical elements were modelled with uninsulated external cavity walls made of hollow bricks and finished with plaster and double-glazed windows with wooden frames. Horizontal elements consisted of uninsulated floors made of concrete slabs and bricks. Table 2shows the envelope thermophysical properties assigned to the BEMs composing the generic district in the Reference case, as reported in the abacus of the UNI/TR 11552:2014 standard [55] and a previous study [56]. Table 2. Energy performance of the building envelope of the Reference case BEM. Envelope Element Parameter (u.m.) Value Walls U value (W/m2K) 0.98 Windows U value (W/m2K) 3.02 G value (-) 0.76 First heated floor U value (W/m2K) 1.64 Roof U value (W/m2K) 0.92 2.1.3. Thermal Systems To represent the most common practice, the following configuration was considered in both case studies. All buildings were assumed as equipped with decentralized gasbased boilers for SH, individual gas-based water heaters for DHW, and individual direct expansion (DX) multi-splits made of an external unit and 3 internal units per flat for SC. To consider the use of splits only in alternatively occupied spaces (e.g., bedrooms and living Sustainability 2022,14, 12303 8 of 20 rooms), their activation and the subsequent energy consumption were set to cover 50% of the SC in reference to the entire air volume. To simulate the systems’ performance, the global seasonal efficiencies were adopted according to the regulation in force [ 57 ] by considering the contribution of each subsystem (supply, distribution, emission, and control). 2.2. Retrofit Scenarios As previously described, the retrofit scenarios for upgrading the generic district assessed in the present paper included any, or a combination of, the following: (i) Anyway measures, including renovation strategies carried out to restore the functionality of the building, which do not imply an improvement of the building’s energy performance and (ii) EEMs, considering more advanced strategies that provide improved energy performance. A summary of both approaches is described in the following section. 2.2.1. Anyway Measures Anyway measures were first defined in the precedent project, IEA Annex 56 [ 16 , 58 ]. They include a set of measures addressed to the thermal envelope of the buildings and the thermal systems of the buildings. The approach is made two-fold: • With the Anyway measures applied to the building thermal envelope, three actions were considered: (i) the replacement of the existing deteriorated external plaster of the walls, covering up to 30 % of the overall surface; (ii) the installation of an upperslated finished new waterproof roof covering the old existing one; and (iii) the general repair of the existing windows (i.e., replacement of damaged hardware, sanding of the wooden windows, filling, and final painting). • With the Anyway measures addressed to the building thermal systems, apart from the regular maintenance actions to keep a good functioning of the devices, the gradual replacement of the gas-based thermal plants was considered due to their lifetime expiration, spread over the 30 years of evaluation under consideration (see Section 2.3), namely the decentralized gas-based boilers, the individual gas-based DHW heaters, and the individual condensing units with a gas refill of the direct expansion cooling systems. Hereinafter, the defined scenarios are named with a prefix derived from the city to which they refer, i.e., “MI_” for Milan and “RO_” for Rome. The refurbishment scenarios are named “envel refurb (ExistSyst)”. 2.2.2. Envelope EEMs The EEMs applied on the thermal envelope of the buildings go a step further in upgrading the existing constructions to improve the building’s energy performance up to the targets set by the national regulation [ 59 ]. They consist of three main strategies: (i) the replacement of the existing windows with low-e triple-glazed ones in Milan and low-e double-glazed ones in Rome, both with argon-filled cavities and an aluminium frame with a thermal brake; (ii) the addition of an EPS external thermal insulation composite system (ETICS) on the existing façades; and (iii) the addition of EPS external insulating walkable panels on the building roof overlapped by waterproof covering with an upper-slated finishing. Considering these EEMs on the envelope, different scenarios were defined. Those associated with existing systems are named “envel insul (ExistSyst)”; those associated with the replacement of an existing thermal system with new gas-based ones (and individual air-to-water heat pumps (AtoW HPs) installed to produce DHW [ 60 ]) are named “envel insul + NewGasSyst”. 2.2.3. Thermal System EEMs This set of measures contemplated upgrading the building systems for SH and DHW, with new ones exploiting the energy from RES, in addition to some of the previously Sustainability 2022,14, 12303 9 of 20 defined scenarios. None of the considered Thermal system EEM actions alluded to the resettlement of the tenants, i.e., the existing distribution pipes at the building level were maintained at the original state in each apartment. Starting from a scenario in which the thermal envelope performance is that of Anyway measures (without thermal improvement in the envelope), the defined Thermal system EEM scenarios regarded two different actions: (i) the replacement of the gas-based existing systems with more efficient new ones, named “envel refurb + NewGasSyst”, or (ii) the substitution of the existing systems with decentralized high-temperature air-to-water heat pumps (HT-AtoW HPs) to maintain the proper level of water temperature supply to the radiators in the absence of envelope insulation and the installation of individual AtoW HPs for DHW, named “envel refurb + DecRenSyst (HT_AtoW_HP)”. If the thermal envelope of the buildings was already improved through an Envelope EEM measure, the decentralized scenario will regard the installation of building-level low-temperature air-to-water heat pumps (LT_AtoW_HP) and will be named “envel insul + DecRenSyst (LT_AtoW_HP)”, together with the installation of individual AtoW HPs for DHW. As a further step, the realization of a new district heating (DH) network was considered for renewable-based SH centralized scenarios, together with the installation of individual AtoW HPs for DHW. Different energy supply options were defined for upgrading the generic district thermal systems as follows: (i) the “DH Biomass” scenario considers a DH fuelled by a biomass plant with exchangers as substations; (ii) the “DH GSHP” scenario considers a DH fuelled by a ground source heat pump (GSHP) with vertical probes and heat exchangers as substations; and (iii) the “DH SolTh+WtoW_HP” scenario considers a DH fuelled by a solar system adopting seasonal thermal storage (SolTh) with water-to-water heat pumps (WtoW HPs) as substations. Again, all these scenarios included the installation of individual AtoW HPs for DHW. 2.2.4. PV System Scenarios As mentioned before, the defined renewable-based scenarios for the generic district renovation were also upgraded by integrating solar energy production. For sizing the system, the considered PV panels have a nominal power of 250 W p and an efficiency of 14%. They were assumed to be tilted, mounted on the roof (facing south), and properly spaced to avoid mutual shading and the shading cast by stairwell volumes, as well as to allow their maintenance, thus conservatively covering 50% of the available net building roof surface. Hence, the entire PV system has a size of 26.4 kWp and can potentially produce 68.3 MWh of electricity in Milan and 79.4 MWh in Rome, according to the PVGIS tool [61]. Therefore, whenever the previously defined scenarios consider PV integration, they are hereinafter denoted by adding the suffix “+ PV” to their original name. 2.3. Costs Analysis To estimate the cost of interventions, recent building price lists for public works generally used in public tenders involving large size works were adopted for both case studies, i.e., the price list of Lombardy Region in 2020 [ 62 ] for Milan and the pricelist of Lazio Region in 2020 [ 63 ] for Rome, as already outlined in previous studies [ 16 , 58 ]. The southern case of Rome reveals some higher costs due to logistics and transportation matters given its further distance from the main production centres. Missing data in any of the two mentioned price lists regarding the considered interventions were supplied with costs found in other price lists available at the national level or eventually with average costs taken from scientific literature and technical documentation. To determine work costs, no extra discounts were considered for design and administrative building process costs. The costs of Anyway measures and Envelope EEMs include the rental of the scaffolding for the period needed; the transportation and disposal of waste materials; the finishing of surfaces (e.g., wall painting); and, in the case of envelope insulation, the adaptations to the new thickness of the windowsill, balcony joints, etc. Sustainability 2022,14, 12303 16 of 20 On the contrary, the PBT of low-temperature HPs with PV integration would create an increase of about two years in the same location. Sustainability2022,14,1230317of22   Figure8.NPV(k/EUR)andPBT(years)fordifferentscenariostoupgradethebuildingsʹenvelopes and/orimplementdecentralizedsolutions,asextracostsfromareferencecasewiththebuildings’ envelopesrefurbishedthroughAnywaymeasuresandexistingthermalsystemsreplacedwithnew gas‐basedones. Figure9presentstheextracoststhatwouldarisefromupgradingthethermalsystemstoRES‐basedoneswithPVintegration,takingalready‐insulatedbuildingenvelopes andnewgas‐basedplantsasastartingpoint.ThePBTsoftheupgradingsolutionsfor thermalsystemsthatdidnotintegratePVsystemshavenotbeenreportedastheyallpresentedPBTsgreaterthan30years.Forinstance,biomass‐fuelledDHnetworksinMilan reporteda31‐yearPBT,highlightingtheconvenienceofadoptingPV‐integratedsolutions inbothcities.ThePBTofthereportedsolutionsrangesbetween12and17years,except forthescenariothatconsideredasolarthermalDHwithseasonalthermalstorageinMilan,whichwasnotreportedduetoaPBTof41years.  Figure9.NPV(k/EUR)andPBT(years)fordifferentscenariostoupgradethebuildingsʹthermal systemswithRES‐basedthermalsystemswithPVintegration,asextracostsfromareferencecase withthebuildings’envelopeinsulatedandexistingthermalsystemsreplacedwithnewgas‐based ones. Figure 9. NPV (k/EUR) and PBT (years) for different scenarios to upgrade the buildings’ thermal systems with RES-based thermal systems with PV integration, as extra costs from a reference case with the buildings’ envelope insulated and existing thermal systems replaced with new gas-based ones. Sustainability2022,14,1230318of22  Additionally,thepresentresearchaimstohighlighttheeffectofincreasedenergy prices,suchtheoneexperiencedinthefirstquarterof2022[25],ontheconvenienceof differentinvestigatedscenarios. Figure10showsthePBTafterthestrategies’increaseinenergyprices,whichimplied insulatingthebuildingenvelopesand/orupgradingthethermalsystems,takinganalready‐refurbishedbuildingthroughAnywaymeasuresandnewgas‐basedplantsasastartingpoint.Comparedtothepreviousassessment,asreportedinFigure8,allPBTsarereduced,evensettingbelow10years.Inthiscase,Romedeservesspecialattention,aslowtemperatureHPswithoutPVsupportpresentedgreaterPBTsthan30years,andnowthey aresetat10.Onthecontrary,thePBToflow‐temperatureHPswithPVintegrationwould createanincreaseofabouttwoyearsinthesamelocation.  Figure10.NPV(k/EUR)andPBT(years)fordifferentscenariostoupgradethebuildings’envelopes and/orimplementdecentralizedsolutions,asextracostsfromareferencecasewiththebuildings envelopesrefurbishedthroughAnywaymeasuresandexistingthermalsystemsreplacedwithnew gas‐basedones,aftertheincreaseinenergyprices. Figure11showsthesecondsetofstrategies:upgradingthethermalsystemstoRES‐ basedoneswithPVintegration,takingalready‐insulatedbuildingenvelopesandnew gas‐basedplantsasastartingpoint.Inthiscase,thePBTreductioninallPV‐integrated solutionsissetbetween5and8years,butforsolarthermalsystemswithseasonalthermal storageandPVsupport,aPBTof21yearsisstillpresented,despitebecomingaconvenient strategyinMilanafterthepricesrise.Biomass‐fuelledDHnowshowsa10‐yearPBTin Milan,whileitarrivesuntil30yearsinthecaseinRome(notreportedinthechart).The leastconvenientscenariosarethosethatconsiderlow‐temperatureHPswithoutPV,presentinga21‐yearPBTinMilanandaPBThigherthan30yearsinRome;asaresult,the latterisnotreportedinthechart. Figure 10. NPV (k/EUR) and PBT (years) for different scenarios to upgrade the buildings’ envelopes and/or implement decentralized solutions, as extra costs from a reference case with the buildings envelopes refurbished through Anyway measures and existing thermal systems replaced with new gas-based ones, after the increase in energy prices. Figure 11 shows the second set of strategies: upgrading the thermal systems to RES- based ones with PV integration, taking already-insulated building envelopes and new gas-based plants as a starting point. In this case, the PBT reduction in all PV-integrated solutions is set between 5 and 8 years, but for solar thermal systems with seasonal thermal storage and PV support, a PBT of 21 years is still presented, despite becoming a convenient strategy in Milan after the prices rise. Biomass-fuelled DH now shows a 10-year PBT in Milan, while it arrives until 30 years in the case in Rome (not reported in the chart). The least convenient scenarios are those that consider low-temperature HPs without PV, Sustainability 2022,14, 12303 17 of 20 presenting a 21-year PBT in Milan and a PBT higher than 30 years in Rome; as a result, the latter is not reported in the chart. Sustainability2022,14,1230319of22   Figure11.NPV(k/EUR)andPBT(years)fordifferentscenariostoupgradethebuildingsʹthermal systemswithRES‐basedthermalsystemswithPVintegration,asextracostsfromareferencecase withthebuildings’envelopeinsulatedandexistingthermalsystemsreplacedwithnewgas‐based ones,aftertheincreaseinenergyprices. 4.Conclusions WithintheframeworkoftheInternationalEnergyAgencyAnnex75project,thepresentstudyaimedtoassessthecost‐effectivenessofbuildingrenovationscenariosatthe districtscale,consideringprevailingSH‐dominatedclimatesinItalyasarepresentative areaofSouthernEuropeMediterraneancountries.Aseriesofbuildingrenovationstrategiesareinvestigatedandcomparedthroughagenericdistrictapproach,withBEMsbeing representativeoftheItalianhousingstockfromtheperiod1960–1980,placedinMilanand Rome.Foreachgenericdistrict,asetofenergyefficiencyscenarios(basedonmeasures usedtoimprovethebuildingenvelopes)andasetoffeasibleimprovedenergysupply scenariosareassessed,includingcentralizedanddecentralizedsystemswiththeintegrationofRES,seasonalthermalstorage,andPVsupport,fromtheperspectiveofprimary energyconsumptionandglobalcost. Ingeneral,insulatingthebuildingenvelopesisonlycost‐effectiveinthenorthern areasofItaly.Inadditiontothis,decentralizedsystemsatthebuildinglevelthroughlowtemperatureair‐to‐waterheatpumps,coupledwithPVsupport,bringprimaryenergy consumptiontozerobutarealessconvenientstrategyfromtheeconomicpointofview, asthisimpliesahigherinvestmentthanjustinsulatingthebuildingenvelopesremaining withintheexistinggas‐basedthermalsystems.DuetothewideravailabilityofsolarradiationinthecaseofRome,acombinationofthesetwostrategieswouldhaveashorterPBT (19years)thanjustinsulatingtheenvelope(30years). Inthecaseofaninsulatedbuildingenvelope,theswitchtodistrictnetscenarios basedonbiomassorGSHPisalwayscost‐effectiveifcoupledwithPVsystems.Moreover, thePVsystemmakesDHsolarthermalcost‐effectiveinthecaseofRome.Otherwise,implementingtheseDHtechnologieswithoutPVintegrationwouldgenerategreaterannual costsandPBTsgreaterthan30years,whicharenotconvenient. Afurtherstepintheinvestigationhighlightsthatsomescenarioscouldimprovethe conveniencefollowingahypotheticalriseinenergyprices,suchastheonetakingplacein recentmonths.Assuch,decentralizedandcentralizedstrategieswithPVshowPBTs smallerthan10years,exceptforthesolarthermal‐basedDHwithPVinMilan.Onthe contrary,implementinglow‐temperatureHPswithoutPVsupportinRome,whichpresentedmorethana30‐yearPBTbeforetheriseinenergyprices,setsa10‐yearPBTafter Figure 11. NPV (k/EUR) and PBT (years) for different scenarios to upgrade the buildings’ thermal systems with RES-based thermal systems with PV integration, as extra costs from a reference case with the buildings’ envelope insulated and existing thermal systems replaced with new gas-based ones, after the increase in energy prices. 4. Conclusions Within the framework of the International Energy Agency Annex 75 project, the present study aimed to assess the cost-effectiveness of building renovation scenarios at the district scale, considering prevailing SH-dominated climates in Italy as a representative area of Southern Europe Mediterranean countries. A series of building renovation strategies are investigated and compared through a generic district approach, with BEMs being representative of the Italian housing stock from the period 1960–1980, placed in Milan and Rome. For each generic district, a set of energy efficiency scenarios (based on measures used to improve the building envelopes) and a set of feasible improved energy supply scenarios are assessed, including centralized and decentralized systems with the integration of RES, seasonal thermal storage, and PV support, from the perspective of primary energy consumption and global cost. In general, insulating the building envelopes is only cost-effective in the northern areas of Italy. In addition to this, decentralized systems at the building level through low-temperature air-to-water heat pumps, coupled with PV support, bring primary energy consumption to zero but are a less convenient strategy from the economic point of view, as this implies a higher investment than just insulating the building envelopes remaining within the existing gas-based thermal systems. Due to the wider availability of solar radiation in the case of Rome, a combination of these two strategies would have a shorter PBT (19 years) than just insulating the envelope (30 years). In the case of an insulated building envelope, the switch to district net scenarios based on biomass or GSHP is always cost-effective if coupled with PV systems. Moreover, the PV system makes DH solar thermal cost-effective in the case of Rome. Otherwise, implementing these DH technologies without PV integration would generate greater annual costs and PBTs greater than 30 years, which are not convenient. A further step in the investigation highlights that some scenarios could improve the convenience following a hypothetical rise in energy prices, such as the one taking place in recent months. As such, decentralized and centralized strategies with PV show PBTs smaller than 10 years, except for the solar thermal-based DH with PV in Milan. On Sustainability 2022,14, 12303 18 of 20 the contrary, implementing low-temperature HPs without PV support in Rome, which presented more than a 30-year PBT before the rise in energy prices, sets a 10-year PBT after the increase, which is even shorter than the PBT for the same strategy integrating PV. The only centralized strategy without PV integration that benefits from the price increase is the biomass-fuelled DH in Milan. This study aims to guide policymakers, companies working in the field of energy transition, and building owners in upgrading existing Italian building stock in a costeffective way towards low-energy solutions and related emissions. Moreover, given that the considered context partially shows warm-climate features, i.e., in the case of Rome, the research outputs can provide insights on building energy by upgrading to those European areas, thus presenting a low SH energy demand and the large availability of solar energy resources. Author Contributions: Conceptualization, S.F. and P.R.; methodology, T.D.M., S.F. and P.R.; software, T.D.M., S.F. and F.Z.; validation, T.D.M. and S.F.; formal analysis, T.D.M. and S.F.; investigation, T.D.M., S.F., L.T. and F.Z.; resources, T.D.M., S.F., L.T. and F.Z.; data curation, T.B., T.D.M., S.F. and F.Z.; writing—original draft preparation, T.B., T.D.M., L.T. and F.Z.; writing—review and editing, T.B., S.F. and F.Z.; visualization, T.B. and S.F.; supervision, S.F. and P.R. All authors have read and agreed to the published version of the manuscript. Funding: This research received no external funding. Conflicts of Interest: The authors declare no conflict of interest. References 1. European Commission. Energy Efficiency in Buildings; European Commission: Brussels, Belgium, 2020. 2. Buildings Performance Institute Europe (BPIE). What is the State of the EU Building Stock? Building Performance Institute Europe (BPIE): Brussels, Belgium, 2017. 3. European Commission. 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