Entrepreneurship

Abstract

Bioengineered insulation materials for the building construction is an exciting promise that science and engineering can bring to our homes. Committed with this mission we envisioned HESTIA's market potential by understanding the current needs, regulations and diverse applications of insulation materials in Switzerland. We seek to align these findings with our core purpose, provide a solution that copes with the energy crisis and is set to be assessed with the economic reality.

The renovation of existing buildings constitutes one of the main activities for construction companies and planners. It’s a priority for these aged buildings to meet up with today’s energy performance standards as well as to regain market value and increase the comfort living for the users. Among others, building renovation is the niche of choice as we focused ourselves on building a business case around it, while remaining aligned with our values and core purpose.

Problem Definition

Construction industry is responsible for 39% of the world’s carbon emissions. In Switzerland, the building stock accounts for 44% of the final energy consumption, nearly two-thirds of the household’s energy consumption is attributable to heating.1 Many buildings are poorly insulated or not insulated at all, dismissing the need to reduce energy consumption due to heating. Consequently, there is a significant loss of monetary resources as a result of the rising prices of fossil fuels which are still the main building’s energy source.

Why is INSULATION a solution but also a problem?

The greatest potential for energy savings is in the building envelope, which entails the walls, the roof and floor systems of our dwellings. Insulation materials are one of the main components of these envelope systems, decreasing the energy exchange between the interior and exterior of spaces. Efficient insulation materials decrease the heating and cooling costs while contributing to the reduction of operational energy consumption of the building over the long term.

Thermal insulation materials are highly relevant in terms of environmental impact, insulation material systems comprises the insulation materials, residues, and contaminations in the insulation material. The recycling of insulation materials is still rather uncommon in Switzerland, materials coming from deconstruction practices are mainly fed to waste incineration plants.2

  • The quality of the building envelope resulted in a 29.1 PJ reduction in energy consumption 2000 - 20203

Our solution

Biodegradable Cellulose Aerogel

The implementation of a biodegradable insulative material into building’s construction systems provides an alternative solution to the waste management struggle of the construction industry. It also reduces the risk of thermal bridges in the building’s envelope, a construction technical challenge, thanks to its thin thickness and high thermal performance.

In Switzerland, improving the building’s energy efficiency through the implementation of optimized insulation systems, reduces energy expenditure while granting energy efficiency labels to the building, such as Minergie-P or CECB A/A. These are attributions that certify the building’s optimal ecological performance through its functionality which in turn increase the architectural object’s attractiveness and therefore its market value, while responding to today’s environmental needs.3

Stakeholder Analysis

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Market Analysis

Switzerland accounted for 1.8 million residential buildings in the building stock, plus approximately 1 million non-residential buildings by 2020.5

More than a third (38%) of the Swiss stock buildings were built in the last 40 years, i.e. after 1980.6 Which 45% correspond to single-family homes, only 36% of multi-unit buildings and 20% of other categories (buildings not exclusively for residential use). This implies a vast potential market for existing buildings, which due to their age need to be renovated or restored in order to regain functional performance and value.

Market Segmentation

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Government Subventions

Single family houses (56.8% of buildings in Switzerland) could be our initial target in the market. Federal and cantonal government initiatives, such as Le Programme Bâtiment, facilitate and promote, through financial incentives, the renovation of the existing buildings in search of improving the household’s residences' energy efficiency.

The implementation of a highly performant insulation system is a high priority since better insulation can reduce the heat requirement by more than half, making the forefront investment rentable at a medium-long term horizon.

Since its launch in 2010, a total of CHF 2.7 billion of subsidies have been paid out under the program. As a result, the Swiss building stock has reduced its annual energy consumption by 2.8 billion kilowatt hours (kWh) and its annual CO2 emissions by 750,000 tons.8

SOCIO, GEO POLITICAL CONTEXT

The unstable socio and geopolitical environment in the European continent has led to soaring prices for energy sources due to the shortage of natural gas, one of the main energy sources for the Swiss territory as well many other countries.

SWISS REGULATIONS regarding the ENERGY CRISIS

The local government has set in place a multitude of mechanisms, initiatives and restrictions that seek to cope with the current energy crisis. Since a large proportion of natural gas is used for heating (40%), and the country has no gas production sites nor seasonal storage facilities, reducing consumption is a must in the short term. If the natural gas shortage persists, the Federal Council may order the interruption of gas supplies, a recently announced measure by the government's national campaign in order to economize energy resources.9

Forward-looking and long term alternatives have been taken into more relevance nowadays, with the aim to reduce the dependence of artificial heating for our dwellings. For instance, the improvement of the thermal envelope of existing buildings with the application of optimized technologies are appealing solutions.

Technology Development and Investment

The Swiss cantons have contributed almost 361 million CHF (Swiss francs) to renovation or new construction projects within the framework of their promotion programs (compared to 299 million CHF in 2020). The largest share, 126 million CHF, was for thermal insulation projects.8

This provides an environment for the development of new technologies in the insulation market industry. Silica Aerogel, an insulation material technology developed by EMPA, it’s a great study case since its technology development it’s very similar to our biodegradable cellulose aerogel, nevertheless its artificial composition prevents it from having biodegradable capabilities.

Our solution in detail

Comparison with similar products in the Market

About 1000 m3 of Silica aerogel are being approximately produced every year for this new technology, with a market value 400 million CHF, of which 20% of its production is destined for building insulation systems, out of which 25-50% are in Switzerland. Local companies such as Agitec, propose the insulation of household’s properties for 6000 CHF / m3, not being so attractive compared to the already established insulations in the market with an approximate price of 1000 CHF / m3. Nevertheless the thin thickness of the Aerogel provides an economy of usable space of the real state, subject to the construction system used for the building in focus, contrary to the thicker insulations in the market.

SWOT ANALYSIS

Conclusions

Highly performant insulation systems have proven to be a key factor when renovating existing buildings or constructing new ones. The encouragement and efforts are set in place for people to take on the chance to improve their building’s energy consumption and minimize its environmental impact, while adding value for their buildings additionally to better thermal comfort. The implementation of our Biodegradable Cellulose Aerogel at the extent of the full envelope of the building is not yet an economic reality given the high production costs of our technology and the current established insulation market in Switzerland. Nevertheless, the application of our bioengineered insulation material is highly attractive due to its thin section given that it’s possible to apply it in places where current insulation materials can’t perform as well, notably on window frames and other thermal bridges in the building envelope.

References

  1. Yahaya Hassan LABARAN Vivek Shankar MATHUR Mahmoud Murtala FAROUQ (2021)
    The carbon footprint of construction industry: A review of direct and indirect emission
  2. YNiko Heeren, Stefanie Hellweg (2018)
    Tracking Construction Material over Space and Time: Prospective and Geo-referenced Modeling of Building Stocks and Construction Material Flows
  3. Office fédéral de l’énergie OFEN (2022)
    Rapport annuel 2000-2021 du Programme Bâtiments
  4. TEP Energy (2016)
    Analysis of the State of Insulation Materials in the Swiss Building Stock
  5. Office fédéral de l’énergie OFEN (2022)
    Parc Immobilier 2050 - Vision de l’OFEN
  6. Office fédéral de la statistique (2022)
    Age du bâtiment
  7. Federal Statistical Office (2022)
    Distribution of buildings and their occupants by building category
  8. Office fédéral de l'énergie (2022)
    Des subventions très demandées: 361 millions de francs ont été versés à des projets d’assainissement et de nouvelles constructions en 2021
  9. Conseil fédéral Helvétique, Office fédéral pour l'approvisionnement économique du pays, Office fédéral de l'énergie (2022)
    Énergie : le Conseil fédéral décide de principes en cas de pénurie de gaz