The current challenges regarding energy security, skyrocketing energy prices and the cost of living intersected with the climate crisis highlight how energy efficiency is more indispensable than ever as the efficiency offers critical quick solution to these most urgent problems of the world, according to a new report by the International Energy Agency (IEA) on Wednesday.
Doubling the rate of energy intensity improvement, a key measure of the economy's energy efficiency, from 2% to 4% per year till 2030 has the potential to avoid 95 exajoule (EJ) a year of final energy consumption which is equivalent to the current final energy consumption of China while ending fossil fuel reliance on Russia, finds the report entitled 'The Value of Urgent Action on Energy Efficiency'.
It was launched during the IEA's 7th Annual Global Conference on Energy Efficiency in Sonderborg, Denmark. The conference is jointly organized by the IEA and the Denmark's Ministry of Climate, Energy and Utilities with support from Danish engineering company Danfoss.
The conference comes at a time when the world contends with 'the first global energy crisis,' as IEA's head, Fatih Birol, refers to the current crisis. The focus of the conference is about how to implement measures quickly to reduce energy use by easing cost pressures on consumers, cutting reliance on fuel imports and accelerating progress towards climate goals.
Energy efficiency solutions include a variety of steps from using smart technology to run the infrastructure, buildings and machinery more efficiently to using big data to optimize the way of heating and cooling the buildings.
'Energy efficiency is a critical solution to so many of the world's most urgent challenges. It can simultaneously make our energy supplies more affordable, more secure and more sustainable. But inexplicably, government and business leaders are failing to sufficiently act on this,' Birol said launching the report.
'The oil shocks of the 1970s set in motion major advances in efficiency and it is utterly essential that efficiency is at the heart of the response to today's global energy crisis.'
- Energy efficiency could cut a third of total emissions needed for net zero target
In a high energy efficiency scenario, according to IEA analysis, final energy demand can be around 5% lower by 2030 but it can serve an economy 40% larger.
Energy efficiency achievement hinges on a global push on measures including electrification, behavior change, digitalization and material efficiency in industry.
'Slower action would lock-in higher energy consumption for years to come,' the IEA warned in the report.
Stepping up action in energy efficiency could reduce CO2 emissions by an additional 5 gigatons per year by 2030 compared with current policy settings which corresponds to about a third of the total emissions abatement needed this decade for reaching net zero by 2050.
Without the global energy intensity gains of the last two decades, emissions growth would have been almost double, or about 8 gigatons per year higher in 2019, the report finds.
Reducing final energy consumption by 95 EJ with energy efficiency measures by 2030 helps avoid almost 30 million barrels of oil a day, about triple Russia's average daily production in 2021 as well as 650 billion cubic meters of natural gas per year, around four times what the European Union imported from Russia last year.
Cutting energy consumption with efficiency solutions can contribute to lowering household energy bills by at least $650 billion a year by 2030 compared to current policies.
The IEA report finds that increasing investment to achieve energy savings can support an extra 10 million jobs in 8 years in efficiency-related fields such as new construction and building retrofits, manufacturing and transport infrastructure.
- Solutions to improve energy efficiency already exist
IEA refers to energy efficiency as the 'first fuel' as the cleanest, cheapest and most reliable source of energy is what countries can avoid using while still providing full energy services for citizens.
The IEA's 7th Annual Global Conference on Energy Efficiency in Sonderborg, Denmark, is bringing together about 25 ministers from countries around the world including Denmark, Egypt, Estonia, Germany, Hungary, Indonesia, Ireland, New Zealand, Nigeria, Panama, Poland, Senegal, Sweden and the United Kingdom as well as other high level participants.
Ukrainian Energy Minister Herman Halushchenko is expected to address the Conference live via video link. Decision-makers from industry, finance, international organisations and civil society will also participate in the discussions.
'The leaders meeting at the IEA Global Conference on Energy Efficiency need to make this the moment when the world hits the accelerator on efficiency – or we may fail to respond to the current energy crisis properly and pay the price for years to come,' Birol said.
'It is no longer a question of whether we should implement more energy efficient solutions and technologies globally. It is a question of how we are going to do that. By increasing our energy efficiency, we can reduce our dependence of Russian oil and gas completely and move closer to achieving climate neutrality,' Denmark's Minister of Climate, Energy and Utilities, Dan Jorgensen said.
Danfoss President and CEO Kim Fausing stressed that if the world is to meet climate goals to limit global warming, energy efficiency measures must be prioritized.
'A third of the reduction needed in CO2 emissions this decade according to the IEA net zero scenario must come from improvements in energy efficiency. The good news is that the solutions are there to improve energy efficiency in all sectors. We do not need to wait. We need action because the greenest energy is the energy we do not use,' he said.
By Nuran Erkul Kaya in Sonderborg, Denmark