Energy Efficiency is Key to Long Term Sustainability

Energy companies are under pressure to move away from fossil fuels and embrace more sustainable energy sources. Renewables are one area of focus, but energy efficiency can also play a big role in reducing carbon emissions. In fact, increasing the current energy efficiency rate from 2% to 4% in the next decade will move the industry closer to an IEA Net Zero Emissions by 2050 Scenario, according to the International Energy Agency (IEA).

Energy efficiency programs are designed to reduce demand, leading to less electricity consumption and carbon emissions. The IEA goal has the potential to avoid 95 exajoule (EJ) a year of final energy consumption, which is equivalent to the current annual energy consumption of China. In this scenario, energy demand would be 5% lower by 2030 while still serving 40% more people.

A Bevy of Benefits  

In other terms, achieving 95 EJ of energy savings per year by 2030 avoids relying on nearly 30 million barrels of oil per day, which is roughly triple Russia’s average production in 2021. Another metric is reducing 650 billion cubic metres (bcm) of natural gas per year, around four times what the European Union imported from Russia in 2021.

So, reaching the goals would reduce benefit the industry in a number of ways. In addition, household air pollution is linked to around 2.5 million premature deaths a year, with women and children most affected, according to the IEA.

Shifting demand provides clean, efficient cooking and heating to all those who currently lack it. They would avoid over 20 EJ use of traditional biomass, sources, such as wood and charcoal, in 2030, which dramatically improve the lives of billions of people.

Falling Short of Goals

However, the energy industry has struggled to set and reach its energy efficiency goals. From 2010 to 2019, the global annual improvements in energy intensity averaged around 1.9%, well below the 2.6% target set at the start of that decade. The initial estimates for 2020 point to a substantial decrease in energy efficiency programs. Utilities had to pivot and focus on reshaping internal business systems because of the Covid-19 pandemic.

Energy companies have been trying to forge a clear path from the fossil fuels of yesteryear to tomorrow’ renewable energy, with a main driver being the desire to reduce carbon emissions. Energy efficiency programs can help to bridge that gap. However, to date, their implementation has lagged milestones, and as a result, opportunities have been missed.  Will that trend continue?