Riddle: What’s as big as the amount of energy used by the European Union…and getting even bigger?
The answer is the amount of energy we’re not using. Or more specifically, it is the energy saved in 2011 by the US and 10 other countries – Australia, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Sweden, and the United Kingdom, all member nations of the International Energy Agency (IEA).
That’s according to the IEA’s new “The Energy Efficiency Market Report 2014,” which puts in perspective just how important energy efficiency has become.
Together, the 11 countries reduced their energy use by 1, 337 million tons of oil-equivalent (Mtoe) in 2011 — more than all of the fuel consumed by the European Union from all energy sources combined.
Or another way to look at it — these countries effectively displaced an entire continent’s energy demand, says IEA.
Here are a few other energy efficiency factoids from the report that offer market insight.
- The world avoided using more energy than the supply of oil (1 202 Mtoe), electricity (552 Mtoe) or natural gas (509 Mtoe) in 2011
- Houses got bigger and population grew, but these factors did not influence energy use because of more efficient appliances, light bulbs and heating. In fact, residential energy use has dropped five percent since 2001.
- Energy efficiency investments now represent a $310 to $360 billion investment, and growing.
From this report and others, it is now clear that economic decline, alone, did not cause the energy dive following the 2008 financial meltdown. True, energy use did take a decided dip in 2009 and then start to rise again, but not nearly as much as it would have without the world’s big push to become more energy efficient, according to the report. Without the energy efficiency efforts begun in 2011, the world’s energy use would have been 218 Mtoe higher in 2011. Moreover, had we not made our appliances, cars, buildings and industry more efficienct in the 1970s, we would be consuming 60 percent more energy today.
Perhaps most interesting is how financial markets are reacting to energy efficiency. Financial products are growing in breadth and sophistication. The energy performance service contract — which pays for efficiency improvements through energy savings achieved — is expanding beyond its origins in the US. While the US market for the contracts is about $5 billion, China’s market for the contracts has reached $12 billion, IEA said.
Meanwhile, use is growing of clean energy bonds, green bonds and climate bonds from fixed income markets. Until late 2013, the green bond market relied heavily on development banks (like World Bank). But corporate green bond issues are now growing very rapidly, the report says. IEA also noted an uptick in on-bill financing programs, such as Property Assessed Clean Energy (PACE) in the US, Mexico and Europe
Public finance also continues to be signficant, the report says, with commitments of EUR 16 billion from German public investment bank KfW; EUR 2.1 billion from the European Investment Bank; EUR 453 million from France’s Caisse des Dépôts; and EUR 181 million from the United Kingdom Green Investment Bank.
The report is availabe for a fee here. A free executive summary is here.
This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.