IEA executive director Dr Fatih Birol
Global body the International Energy Agency (IEA) will seek to secure commitments from all governments to improve the global average rate of energy efficiency from 2% a year to 4% a year at the twenty-eighth United Nations Climate Change Conference of the Parties (COP28) to be held in Dubai from November 30.
This goal of doubling yearly energy efficiency improvement was not only achievable but would help to address a significant amount of the greenhouse-gas emissions reduction targets, improve energy security and help to reduce energy prices, IEA executive director Dr Fatih Birol said during the launch of the IEA's 'Energy Efficiency 2023' report, on November 29.
A 4% a year rate of improvement could cut today’s energy bills in advanced countries by one-third and make up 50% of carbon dioxide (CO2) reductions by 2030, the report noted.
"Energy efficiency is critically important in energy policies to address energy security challenges and to bring the cost of energy down for consumers. Energy efficiency also plays an important role in addressing climate challenges," said Birol.
The report showed that, since the start of the global energy crisis two years ago, more than 75% of governments had introduced new energy efficiency policies or had made existing ones stronger, he highlighted.
"This is very impressive, with more than three-quarters making a big push toward energy efficiency. However, this was driven by energy security concerns and to bring the price of energy down for consumers. Governments know that energy efficiency is one of the building blocks of any energy strategy that hopes to reach climate goals," Birol said.
There were some signs that 2022 was a turning point, with a visible change in governments focusing on energy efficiency, driven by the energy crisis and an understanding that more was needed from energy efficiency in terms of its ability to reduce energy costs and emissions and improve energy security, added IEA energy efficiency division and inclusive transitions office head Dr Brian Motherway.
The IEA 'Energy Efficiency 2023' report shows improvement in government policies having an effect in many parts of the economy, but two main areas are industrial motors and air conditioning.
Global applications of efficiency standards for industrial motors have more than tripled over the past few years, which is very beneficial as industrial motors are a major source of energy consumption globally, said Birol.
Another significant area of improvement was in energy efficiency standards for air conditioners. These have been a policy blindspot, but at least there are some energy efficiency standards, albeit not very strong, being applied.
"Air conditioning is set to be a key sector of electricity consumption, especially in developing countries. In this warmest year in history, the growing need for cooling saw the sales of air conditioners in many regions around the world increase by more than 50%," said Birol.
It was important for air conditioners to meet the highest energy efficiency standards to reduce the need to build power plants, he noted.
There were direct relations between weather and electricity demand. For example, in Texas, in the US, a 1 °C increase in temperature can lead to a 4% increase in energy demand, owing to the number of air conditioners and fans present, said Motherway.
In India a 1 °C increase in temperature would only lead to a 2% increase in electricity demand because fewer people have air conditioners, but the number of air conditioners are increasing each year and will only continue to increase.
"On a very hot day in hot regions, air conditioning and cooling can represent up to 75% of the total peak electricity demand. This year in ten of the largest electricity systems in the world, they experienced the highest ever on record electricity peak demand. The need for more air conditioning was a driver of this," he said.
"However, we have seen in the past couple of years many new policies being introduced, and these are welcome developments. This plays out in terms of energy demand, and record sales of high-efficiency, electrified technology are having an impact on energy demand in the relevant sectors in many countries.
"We are starting to see in many countries peaks in residential gas demand and in gasoline demand, and this will continue. The most recent IEA 'World Energy Outlook' showed that, in all scenarios, we expect global peaks in all fossil fuels at the latest before the end of this decade," said Motherway.
POLICY IMPACT
The estimated 2023 rate of progress in energy intensity, which is the main metric used for the energy efficiency of the global economy, is set to fall back to below longer-term trends to 1.3% from a stronger 2% in the prior year.
Additionally, the lower energy intensity improvement rate largely reflects an increase in energy demand of 1.7% in 2023, compared with 1.3% a year ago, the IEA report said.
However, this year’s slower progress in global energy intensity masks exceptional gains in some countries and regions, where strong policy action, increased investments and consumer behaviour changes led to sharp improvements well above the average global rate, the IEA report said.
"This year, the European Union and the US, Korea, Türkiye and the UK, have registered robust improvements ranging from 4% to 14%," the report stated.
The impact of new government policies, regulations and energy-saving programmes, coupled with an unprecedented level of investments to scale up more efficient technologies, are not always immediate, with efficiency gains and energy intensity progress realised over a period of years.
This year’s overall global intensity progress masks more significant gains in some countries and regions as others saw much lower progress, the report noted.
In most sectors, governments can make rapid progress towards doubling by building upon best practice in existing policies and accelerating the deployment of already-available technologies, the report highlighted.
For example, lighting standards in the European Union, India, Japan, South Africa and the UK are already at or exceed the level set out in the Net Zero Emissions by 2050 Scenario.
Similarly, all industrial electric motors within a certain output range sold in the European Union, Japan, Switzerland, Türkiye and the UK must adhere to the efficiency class seen in the Net Zero Emissions by 2050 Scenario.
Similar cases can be found for building regulations, and vehicle standards improvements set to come into force by 2030.
Doubling to 4% a year would reduce CO2 emissions by 7 Gt, or 20% of current total emissions, compared with 2% yearly energy intensity progress to 2030, taking the share of energy efficiency and related measures to half of all emissions reductions this decade.
"This would also cut today’s energy bills in advanced economies by around one-third. Achieving the doubling target would also see 4.5-million more jobs than today in energy efficiency across the manufacturing, building renovation, construction, industry and transport sectors.
"These benefits highlight that now is the time to further exploit efficiency’s potential to address the multiple intersecting crises of energy, climate and cost of living," the IEA emphasised in the report.