IEA: 2022 set to be ‘turning point’ for supercharging energy efficiency efforts
Global investments in energy efficiency are up 16% year-on-year for 2022, driving a rate of improvement almost four times higher than in 2020, the International Energy Agency (IEA) has revealed.
The Agency has today (2 December) published its latest market report on energy efficiency, using preliminary data for 2022 to track investments in more energy-efficient buildings, transport and industry. The report also tracks how these investments are translating into real-world improvements in efficiently using energy.
All in all, there are some promising signs, following two very weak years for energy efficiency investments and improvements in 2020 and 2021. 2020 saw only a minor (0.5%) decrease in global energy intensity. For context, the IEA’s scenario for global net-zero by 2050 involves an average decrease of 4% per year. The IEA attributed weak progress in 2020 to a slowing pace of upgrades and retrofits in buildings and factories, compounded by a reliance on energy-intensive industries as other less energy-intensive sectors were forced to slow or close.
The new report reveals that the global decrease in energy intensity, year-on-year, for 2020, is likely to be around 2%. The iEA has stated that if this progress is built upon in the coming years, we could see a “vital turning point” for accelerated action in this field.
Global energy demand growth is expected to be just 1% for 2022, down from around 5% in 2021.
According to the report, some $560bn has been invested in improving energy efficiency so far this year, a year-on-year increase of 16%. This is largely due to nations scrambling to improve their energy security and reduce bills as they strive to end fossil fuel imports from Russia over its invasion of Ukraine. $270bn of the investment was attributable to direct public spending by governments. Notable public investments highlighted in the report include the EU’s RePower EU programme and Japan’s Green Transformation scheme.
The increase in investment is set to be steepest in the transport sector, at 47% year-on-year. The year-on-year increase in buildings was just 2%, with the IEA citing rising costs in the construction sector as a key challenge. For all sectors, the IEA notes, steeper rates of investment increase are needed in emerging and developing economies.
“The oil shocks of the 1970s led to a massive push by governments on energy efficiency, resulting in substantial improvements in the energy efficiency of cars, appliances and buildings,” said IEA Executive Director Fatih Birol.
“Amid today’s energy crisis, we are seeing signs that energy efficiency is once again being prioritised. Energy efficiency is essential for dealing with today’s crisis, with its huge potential to help tackle the challenges of energy affordability, energy security and climate change.”
Savings to date
While progress to improve energy efficiency over the past decade has been nowhere near sufficient to align with the IEA’s net-zero pathway, the report does note that the energy crisis would be far more expensive now without the work completed to date.
It states that countries reporting to the IEA are set to spend $680bn less on energy than they would have if no action had been taken since 2000. “his reflects end-use energy prices for fuels in IEA countries this year and 24 EJ of avoided energy demand from efficiency-related measures,” the report states.
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