“Efficiency can enable economic growth, reduce emissions and improve energy security. The right efficiency policies could enable the world to achieve more than 40% of the emissions cuts needed to reach its climate goals without new technology.” said Director of EIA.
The impact of efficiency policies has been significant over the last decades. Globally, efficiency gains since 2000 prevented 12% more energy use than would have otherwise been the case in 2017. Energy efficiency is a major driver for uncoupling energy consumption from economic development.
Energy efficiency continued to show improvements in 2018, with the global economy requiring an average of 1.3% less energy inputs for every unit of GDP than in 2017. However, the annual rate of improvement in global primary energy intensity has been falling in recent years, dropping from a high of nearly 3% in 2015 to 1.9% in 2017, and falling again in 2018.
Since 2000, these improvements in the world’s major economies have offset more than a third of the rise in energy-intensive activities. But the positive impact of efficiency policies has been overwhelmed by fast-growing economic activities in emerging countries that boost energy demand. Global energy demand rose by nearly 2% in 2017. This was the fastest rise this decade, driven by economic growth and changes in consumer behaviour.
Also, recent trends show that policy efforts have weakened in recent years. In other words, the improvements in energy efficiency that were seen in recent years are now slowing down as fewer new standards and policies were introduced in the past two years. This has contributed to the acceleration in energy demand growth that was observed in 2017.
Today only around one-third of final energy use is covered by mandatory energy efficiency policies, such as codes and standards, with only marginal coverage growth in recent years. Efforts to strengthen existing energy efficiency policies also remained weak in 2018. Increasing the coverage and strength of codes and standards is a key lever of energy efficiency gains.
The slowdown in the rate of energy efficiency improvement means that efficiency offset 40% less CO2 emissions in 2018 relative to 2017, although it remains the largest contributor to emissions abatement.
Limited improvement in global energy efficiency in 2018 can be attributed to a number of factors. Among these is the static energy efficiency policy environment in 2018, with lacklustre progress on implementing new energy efficiency policies or increasing the stringency of existing policies.
Progress on policy measures such as financial incentives, market-based instruments, and information and capacity building programmes also remains limited. For example, many countries drive efficiency gains by placing an obligation on utilities to meet energy saving targets. However, these targets have not changed since 2014 in over half of the obligation schemes, globally.