The cleanest and safest power plant is the one you don’t have to build thanks to higher energy efficiency, says Noé van Hulst, OECD ambassador of the Netherlands and IEA board chairman. Dubbed the “hidden fuel”, energy efficiency is demand-side driven, meaning it lacks the headline-grabbing milestones of big power plant projects, or other energy supply infrastructure. And through the energy efficiency trend accelerates, “progress on a global scale is still happening too slowly.”
“One reason demand-side policy is so underrated is because energy efficiency is not very sexy. It lacks wonderful ribbon-cutting photo-ops for politicians, and it often can mean higher upfront costs that may put off consumers, even if that leads to long-term savings,” he said. “And yet the important efficiency gains that we have experienced in the last decades have been driven by stronger policies.”
The over 60% plunge in oil prices since the mid-2014s coincided with strong policy drivers that helped to improve global energy intensity by 1.8% since 2015 – more than three times the average rate of improvement seen in 2003-13, as documented in the IEA Energy Efficiency Market Report 2016.
Energy intensity trend seen continue
Today, a third of the world’s energy consumption is covered by mandatory standards and regulations, compared with just 11% in 2000. This helped boost energy efficiency in the areas of lighting, cars, and space heating, and to a lesser extent, appliances.
Global energy intensity improved 1.8% in 2015, three times the annual average of the last decade, while investment in energy efficiency rose 6% to $221 billion, led by growth in the buildings sector. Intensity gains were higher in the emerging economies like China, a trend that is expected to continue. Had efficiency levels not improved substantially over the past 15 years, energy demand in IEA member countries would have risen 12%, to surpass the 2007 peak already two years ago.
“The good news is that global energy efficiency gains are accelerating, even in the current low price environment,” van Hulst underlined.
“But the bad news is that this progress on a global scale is still too happening too slowly. Annual intensity gains need to increase to 2.6% to achieve the global climate goals of the Paris agreement,” he added.
Since there is much untapped potential in energy efficiency, it should be feasible for all countries to further boost energy efficiency. In van Hulst view, policy makers should thrive to apply existing best practices and enshrine them in mandatory energy efficiency standards.
Over 70%of global energy consumption is currently not subject to mandatory efficiency standards. India, Brazil and most Middle Eastern Countries have made significant progress since 2000, but some are still lagging behind: According to IEA figures, the share of Middle Eastern energy consumption covered by mandatory efficiency standards is 15% in 2015, just half the global average.