Report: Energy efficiency revolution would create 12 million new jobs

That is according to the International Energy Agency (IEA). To coincide with its global energy efficiency conference this week, the Agency has published a major new report assessing progress globally to date.

The headline finding is that, while global progress to improve energy efficiency accelerated significantly in 2022, it will still need to almost double. Global energy intensity decreased by 2.2% last year, twice the average of the previous five years, largely due to policy responses to the energy price crisis. A decrease of 4% annually is needed for the delivery of the Paris Agreement on climate.

The IEA has welcomed that nations representing more than 70% of the world’s energy consumption have introduced new and improved energy efficiency policies since the price crisis began in 2021.

But it has also warned that many markets have relied heavily on subsidising bills, with $900bn spent this way globally over the past 18 months. As such, longer-term and more concerted efforts on efficiency are still needed.

The IEA is calling on policymakers to do more to unlock private investment in energy efficiency, as a tripling of investment in this field is needed to deliver that 4% annual decrease in global energy intensity. $600bn was invested in this way last year, and that will need to be at least $1.8trn in 2030.

Policymakers will also, the IEA is stating, need to improve behaviour change communications campaigns and consumer protections around energy efficiency technologies, to ensure that smaller businesses and households play their part.

Its report proposes a three-pronged policy approach comprising regulation (including bans on the worst-performing equipment and buildings), information, and incentives.

Crucially, the IEA is calling on policymakers to sell energy efficiency to citizens as an opportunity rather than a burden. The report outlines the potential for 12 million jobs to be created by the end of the decade in a situation where global annual energy intensity improvements hit the 4% mark. These include roles designing, manufacturing and installing technologies such as low-carbon heating and building retrofit solutions.

Speaking at the IEA’s conference, Danfoss’ president and chief executive Kim Fausing said that while 2022 “was certainly a turning point”, further and faster action is needed. “It is the time to implement, execute and follow-up on energy efficiency and machine productivity,” he told business leaders.

Energy access

In a more energy-efficient world, the IEA has stated, more people will be able to access energy. The potential for more than 800 billion additional people to gain or improve their energy access, largely in some of the poorest parts of the Global South.

The IEA has, separately, published another report this week with input from partners including the World Bank and the International Renewable Energy Agency (IRENA), tracking progress towards energy access globally.

It reveals that 91% of the global population now has electricity access, up from 84% in 2010. Yet progress largely happened before the pandemic, with progress slowing between 2019 and 2021.

The world remains off track to achieving universal electricity access by 2030, in line with the UN’s Sustainable Development Goals. 660 million people, largely in sub-Saharan Africa, will still be without electricity access at the end of the decade.

Even more people – 1.9 billion – will lack clean cooking fuels by this point without further concerted action.

IRENA is calling for “systemic change” in the set-up for international cooperation on energy access and renewable energy to bridge these gaps.

“It is crucial that multilateral financial institutions direct financial flows more equitably around the world to support renewables deployment and related physical infrastructure development,” said IRENA director-general Francesco La Camera.