How energy transition creates value in real estate

A sector at the heart of the transition

The building sector accounts for 45% of final energy consumption in France and a quarter of national greenhouse gas emissions. To achieve the objectives of the National Low-Carbon Strategy, sixty-seven billion euros per year will need to be mobilized until 2030, representing 2.5% of French GDP. Long perceived as a regulatory constraint generating costs, this transformation is radically changing in nature. As Vincent Kientz, co-founder of Blunomy, emphasized: regulatory energy performance has become a market standard, a simple license to operate. Today's challenge lies in the ability to transform this constraint into a value creation lever.

From compliance to market standard

French regulations—RE2020, Climate & Resilience Law, Tertiary Decree, BACS Decree—have accelerated the energy transition of the real estate portfolio. But their large-scale implementation has created a new reality: compliance is no longer a competitive advantage; it's the minimum condition to operate. Beyond financial penalties, the financing policies of institutional investors now condition their capital allocation on the ESG compliance of assets. A non-compliant building becomes more difficult to finance. Compliance is no longer a goal: it's the price of entry.

Five Value Creation Levers

Blunomy analysis deconstructs the impact of the energy transition across five dimensions that quantify how energy performance translates into economic value.

1. ESG Compliance as foundation A non-compliant asset suffers a "brown discount" that can reach one and a half times the cost of necessary works. Conversely, an aligned asset benefits from improved liquidity and unlocks access to the four other levers.
2. Additional revenue Buildings are becoming active players in the energy transition, at the interface between occupants and networks. Solar photovoltaic self-consumption, electrical flexibility, and storage generate new revenue streams. Solar CAPEX can be passed on to the tenant in the lease while reducing their overall bill, creating a mutually beneficial situation that improves asset valuation.
3. Structural Cost Reduction Three families of interventions offer different investment-savings ratios: building envelope (€350-450/m², savings of 40-75%), energy equipment (€150-350/m², savings of 30-90%), and energy management (€10-25/m², savings of 10-25%). Solar self-consumption plays a particularly structural role by reducing and stabilizing tenants' bills over the long term, making the asset significantly more attractive in a market where energy cost control is becoming a decisive selection criterion.
4. Resilience to Climate Risks Transition risks (energy price volatility, EU ETS 2 from 2028, regulatory obsolescence via the CRREM trajectory) and physical risks (heat waves, floods, droughts) directly impact valuation. A non-resilient asset sees its insurability and financing deteriorate. Conversely, an asset that has invested in adaptation benefits from a lower required rate of return—hence an increase in value.
5. Attractiveness to Financiers Financiers have developed precise frameworks for evaluating ESG performance. High-performing assets benefit from improved liquidity and significantly better debt conditions (several tens of basis points difference), as banks are bound by the European taxonomy and their green financing commitments.

A Capital Reallocation Effect

The successful integration of these five levers creates a growing valuation gap, progressively shifting capital flows from lower-performing assets to higher-performing ones. Institutional investors, constrained by their ESG objectives, and banks, guided by the European taxonomy, massively favour assets demonstrating proven performance. The result is a growing market polarization between "future-proof" assets that capitalize on the green premium and lagging assets that suffer an increasing discount. The energy transition doesn't just create value: it redistributes it.

Conclusion

The energy transition in real estate has evolved from a compliance exercise to a determining factor of competitiveness and valuation. Buildings are no longer passive energy consumers: they are becoming active players capable of generating new revenue, structurally reducing their costs, and building their resilience. Players who integrate this vision strategically are building tomorrow's value in a decarbonized economy.

Get in touch with the authors: Vincent Kientz, Sébastien Holl