Global energy efficiency rate dips to slowest increase in a decade

The global rate of energy intensity, a major marker for the world’s use of energy efficiency, has risen by just over one per cent, the slowest rate since the start of the decade, reveals a new report from the International Energy Agency (IEA).

Global primary energy intensity improved by just 1.2% in 2018 according to Energy Efficiency 2019, the IEA’s annual report on energy efficiency.

The rate of improvement has now declined for three years in a row, leaving it well below the 3% minimum that IEA analysis shows is central to achieving global climate and energy goals. If the rate had reached 3% over that period, the world could have generated a further USD 2.6 trillion of economic output – close to the size of the entire French economy – for the same amount of energy.

Dr Fatih Birol, the IEA’s Executive Director, believes that the historic slowdown in energy efficiency last year calls for bold action by policy makers and investors.

“We can improve energy efficiency by 3% per year simply through the use of existing technologies and cost-effective investments. There is no excuse for inaction: ambitious policies need to be put in place to spur investment and put the necessary technologies to work on a global scale,” she said.

The report examines in detail the reasons for the recent deceleration in efficiency progress and claims that it results from a mixture of social and economic trends, combined with some specific factors such as extreme weather.

The paper also argues that policy measures and investment are failing to keep pace with the rising energy demand, meaning that new ways of policy thinking that move beyond traditional approaches are required, particularly to maximise the potential efficiency gains from the rapid spread of digital technologies throughout economies and energy systems.

The new analysis includes a special focus on the ways in which digitalisation is transforming energy efficiency and increasing its value. By multiplying the interconnections among buildings, appliances, equipment and transport systems, digitalisation is providing energy efficiency gains beyond what was possible when these areas remained largely disconnected. While efficiency in these areas has always had benefits for energy systems, digitalisation enables these benefits to be measured and valued more quickly and more accurately.

The report points out that while digital technologies could benefit all sectors and end uses of energy, uncertainty remains over the scale of those benefits. The paper suggests that “much will depend on how policies are designed to respond to the huge opportunities – and to the emerging challenges, most notably the risk of increased energy demand from the mushrooming use of digital devices.”

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