Energy efficiency progress still “well short” of what’s needed for net zero

Efficiency improvements are returning to pre-pandemic levels, however they remain well below the pace needed in a net zero pathway.

Energy efficiency progress still “well short” of what’s needed for net zero

Efficiency improvements are returning to pre-pandemic levels, however they remain well below the pace needed in a net zero pathway.

That’s the conclusion of a new report from the IEA, which finds that annual investment in energy efficiency worldwide needs to triple by 2030 to be consistent with a path towards reaching net zero emissions by 2050.

The Energy Efficiency 2021 report, which is published annually, calls for stronger implementation of clean energy policies – with energy efficiency at their core. It comes shortly after the end of the COP26 Climate Change Conference in Glasgow, whose final statement specifically called for the rapid scaling up of energy efficiency measures, recognising their key role in decarbonising energy systems.

The first fuel

“We consider energy efficiency to be the ‘first fuel’ as it still represents the cleanest and, in most cases, the cheapest way to meet our energy needs. There is no plausible pathway to net zero emissions without using our energy resources much more efficiently,” said IEA Executive Director Fatih Birol. “A step change in energy efficiency will give us a fighting chance of staving off the worst effects of climate change while creating millions of decent jobs and driving down energy bills.”

The report notes that governments have scaled up existing, employment-intensive efficiency programmes, but it also highlights that substantial potential for job creation remains untapped. For example, investments in the energy efficiency of buildings – a well-established driver of construction jobs – are expected to rise by 20% in 2021 compared with pre-pandemic levels. Even with this record level of spending, the report details how 4 million more jobs could be added by 2030 by further increasing spending on efficient buildings, appliances and other measures in line with the IEA’s Net Zero Emissions by 2050 Scenario.

Covid-19 worsened efficiency

After its worst year in a decade in 2020, when the Covid-19 pandemic shifted the centre of economic activity away from services and towards industry, the rate of improvement in global energy intensity – a key indicator of how efficiently the world’s economic activity uses energy – is expected to recover in 2021 to 1.9%. This is line with the average annual rate of improvement over the past 10 years but well below the 4% needed between 2020 and 2030 in the IEA’s pathway to net zero emissions by 2050.

As energy efficiency offers some of the fastest and most cost-effective actions to reduce CO2 emissions, front-loading efficiency measures into net zero strategies will be crucial for closing the gap between climate ambitions and current trends. The report examines over 40 energy efficiency milestones mapped out in the IEA Roadmap to Net Zero by 2050 that can enhance efficiency and help get emission reductions on track.

The role of digital

In addition to well-developed energy efficiency policies such as appliance standards – which in some countries have avoided electricity usage equivalent to their total wind and solar power generation – the report also underlines the increasingly important role for digital technologies in energy efficiency’s future. Rapid uptake of digitally connected devices is helping to expand the scale and scope of benefits from energy efficiency, and can deliver a cheaper, easier and more cost-effective clean energy transition.

It also highlights the role of heat pumps as a key technology to increase efficiency and phase out the use of fossil fuels. The UK has put forward a Heat and Buildings Strategy and aims to install more than 600 000 heat pumps per year by 2028 – an ambitious target that will rely on both fiscal incentives and regulatory phase-out of fossil fuel boilers.

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