Beyond the universal decision maker: renovation policy for decarbonizing energy systems and reducing energy poverty

Renovating buildings is necessary for reducing long-term energy use and helping the decarbonization of the building sector. However, conflicting interests and decision-making power between stakeholders, primarily landlords and tenants, keep investment willingness low. Therefore, energy system modeling must transcend centralized decisions and include the modeling of diverse stakeholders. This paper presents a methodology relying on decomposition methods and game theory to integrate multi-scale and multi-actor energy system optimization, spanning from buildings to national energy systems. The results highlight the key role of PV integration within energy communities and local energy markets in ensuring landlords’ investment returns while mitigating tenants’ energy bills and rent increase. At the national level, most investment in renovation is compensated by decreased investment in grid reinforcement and renewable electricity production. The paper underscores the importance of reducing energy use through renovation and sufficiency measures to lower both infrastructure and energy service expenses.