Global energy efficiency will need to more than double to put the world on track for net zero by 2050, according to a new report from the International Energy Agency (IEA).
The 2021 edition of the Agency’s annual Energy Efficiency Report which was published last month (November) reveals that progress is now back on track as the world emerges from the worst of the Covid-19 pandemic.
2020 saw only a minor (0.5%) improvement to global energy intensity in light of falling energy demands and prices, slowed investment in the energy sector and many energy-using sectors and logistical issues with supply chain and solutions installation.
Global energy intensity is on track to fall 1.9% in 2021, the analysis forecasts – pre-pandemic, the year-on-year fall was 2% in 2019.
‘It is still unclear whether this year’s improved energy intensity will signal the start of a sustained recovery,’ the IEA said in a statement.
‘However, increased investment trends, rising government spending on efficiency – in large part related to recovery plans enacted in response to Covid-19 crisis – new announcements of higher climate ambition and other policy measures offer some encouraging signals.’
The report indicates that, by the end of the year, national policies will have helped to generate $30bn of investment in energy efficiency – around 10% of the total set to be allocated between 2015 and 2021.
In recent months, much growth in energy efficiency investment has been concentrated in Europe with the European Commission’s Renovation Wave and overarching Energy Efficiency Directive, and the UK’s updated Industrial Strategy and Heat and Buildings Strategy.
However, the Agency notes that in its scenario for net zero by 2050, global energy intensity falls by at least 4% each year in the 2020s.
The IEA is urging other countries to follow Europe’s example and implement stricter standards and regulations for energy-using products; consider tax incentives for energy efficiency; increase public spending on building and industrial retrofitting and streamlining planning procedures to make efficiency projects more attractive to private finance.
Private sector spending on energy efficiency between 2021 and 2023 is forecast to be more than twice as high as spending by governments.
The report emphasises the fact that, while wealthy nations are currently accounting for the majority of global investment in energy efficiency, developing and emerging nations also stand to reap benefits in terms of rapid job creation and economic growth, as well as future-proofing infrastructure and industry.
Delivering the 4% annual improvement to global energy intensity, the IEA has predicted, would create four million additional jobs in energy efficiency by 2030, in sectors including construction and retrofitting.
The IEA’s report also outlines the potential for implementing new digital technologies to achieve its aim. It states that, by the end of the year, for the first time in history, there will be more ‘smart’ connected appliances and sensors in the world than people which presents a significant opportunity to drive forward energy efficiency improvements.
At COP26, the IEA and the UK Government launched a Product Efficiency Call to Action, which aims to double the energy efficiency of air conditioning, refrigeration, industrial motor systems and lighting by 2030. These four activities account for more than 40% of global electricity demand every year and a total of 14 countries have now signed up to the initiative.