Slowdown in energy efficiency despite growing government involvement

Energy-efficiency improvements have slowed down, reveals the World Energy Council’s latest study. The report shows that more and more countries are now involved in energy-efficiency policies, but also highlights numerous factors that have affected energy-efficiency progress across 85 countries, representing more than 90% of global consumption.

Christoph Frei, Secretary General of the World Energy Council, said that the slowdown in energy-efficiency improvements must be reversed if future progress was to be made on a stable, sustainable basis: “Energy demand continues to grow, albeit largely against a slowing trajectory. However, the rate of decline in energy intensity has reduced at a much sharper rate. While an uncertain investment outlook, created by the global economic crisis, explains a degree of this decline, more worrying is the growth in certain uses of energy such as household electricity and road transport. This problem is compounded by continually rising energy demand, driven by non-OECD growth where energy intensity is higher than in most OECD countries.”

Most countries have significantly reduced total energy use per unit of GDP over the last three decades, the study finds. The improvements are largely attributable to more efficient key end uses, such as vehicles, appliances, space heating and industrial processes. New standards, educational campaigns and regulatory requirements have helped to move efficiency development forward and have contributed to improved energy efficiency in OECD nations.

Technology development, response to rising energy prices and growing competition in industries have also forced companies to cut energy costs. Western Europe currently boasts the lowest energy intensity, while the CIS has the highest of the large consumer regions, using more than three times more energy per unit of GDP than Europe.

China, Africa and the Middle East all see intensity at two times the European average, while Latin America and OECD Asia Pacific are around 15% higher. India and other Asian countries see their intensity at around 50% higher than Europe, with North America at around 1.45 times the European average.

High energy intensities can be attributable to a number of factors: industry structure, low energy prices and share of energy-intensive industries, for example. The WEC’s ‘World Energy Scenarios: Composing energy futures to 2050’ report sees that global energy demand will grow by a third between 2010 and 2035, with 90% stemming from outside the OECD community. China and India account for half of that growth, with China alone accounting for a third. However, China’s per capita energy consumption in 2035 will still be less than half that of the United States or Australia.

The energy-efficiency report recommends nine core policy proposals that will help to embed efficiency within the future development agenda: energy prices should reflect real costs of supply and thus ensure consumers get the right price signals; consumers need information to be able to make informed decisions; smart billing represents a significant potential of energy savings; innovative financing tools are needed to support investments by consumers; the quality of energy-efficient equipment and services should be verified; regulations should be properly enforced and regularly strengthened; consumer behaviour should be examined and addressed, especially in terms of growing reliance on ICTs; it is necessary to monitor the trends in energy efficiency to be able to evaluate the real impact of energy-efficiency policies; and international and regional cooperation in support of energy efficiency should be enhanced.

The report, ‘World Energy Perspective: Energy Efficiency Policies’, is produced in collaboration with France’s energy and environment agency, ADEME.