Is all this effort to save energy worth it?
Consider this. Had we neglected energy efficiency from 1980 to 2010, worldwide energy use would be 35 percent higher. What does this mean? Look at the amount of energy used in the world’s two largest economies – the United States and China. That’s about how much energy the world saved.
This comes from World Energy Outlook 2012, released November 12 by the International Energy Agency. A stand-up-and-take-notice report for anyone in the energy efficiency industry, it not only explains what the world achieved, but also how far we can go.
“This year’s World Energy Outlook shows that by 2035, we can achieve energy savings equivalent to nearly a fifth of global demand in 2010. In other words, energy efficiency is just as important as unconstrained energy supply, and increased action on efficiency can serve as a unifying energy policy that brings multiple benefits,” said the report.
Most interesting, the report finds that we could halve growth in primary energy worldwide, just by using cost-effective technology that already exists. No gadget or gizmo magic needed here.
“These gains are not based on achieving any major or unexpected technological breakthroughs, but just on taking actions to remove the barriers obstructing the implementation of energy efficiency measures that are economically viable,” says the report.
If countries just stick to new policies that they’ve already announced, the world will see energy intensity gains of 1.8 percent annually from 2010-2035, a significant ramp up from 1 percent annually over the previous 25 year-period. Energy intensity is an important measure because it represents the energy efficiency of an economy – think of it as the amount of energy it takes to achieve a dollar of economic output in the US.
The report also finds significant environmental gains from energy efficiency. Again, just staying with planned policies, energy efficiency will account for 68 percent of global carbon dioxide savings.
What are these planned policies? China is striving for a 16 percent reduction in energy intensity by 2015. The US has new fuel-economy standards for transportation. Europe is looking at a 20 percent cut in energy demand in 2020. Japan is working toward a 10 percent reduction in electricity use by 2030.
As far reaching as these policies may seem, they barely scratch the surface of possible energy savings. “Only a small part of its economic potential is exploited,” the report says. “Over the projection period, four-fifths of the potential in the buildings sector and more than half in industry still remain untapped.”
So IEA offers a blueprint for more savings, what it calls ‘The Efficient World Scenario.’ Among other things, it calls for making energy efficiency gains more visible to consumers, preventing the sale of inefficient technologies through regulation, and creating better financing methods.
If successful, the blue print would cut the demand for oil by an amount equal to the current production of Russia and Norway combined. Worldwide economic output would rise by $18 trillion through 2035 –about what you get if you add together the economies of the United States, Canada, Mexico and Chile today, IEA says.
What countries would benefit the most? India would see a 3 percent gain in gross domestic product by 2035; China 2.1 percent, the United States 1.7 percent and Europe 1.1 percent, according to the 690-page report.
And what would be the cost? The world would need to install about $11.8 trillion in energy efficient technologies, but the price would be offset by $17.5 trillion less in fuel purchases and $5.9 trillion less in fuel extraction and transportation, biofuel production and construction of electric infrastructure.
So is energy efficiency worth it? The IEA numbers indicate it is – and then some.
A free executive summary of World Energy Outlook 2012 is here.
Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.