Energy Efficiency Progress Stalls in 2020: IEA

Improvements in global energy efficiency are at their slowest rate in a decade as a result of the economic impact of the Covid-19 pandemic, the International Energy Agency (IEA) warned in a report published on December 3.

Global primary energy intensity, which serves as an indicator of how efficiently the global economy consumes energy, is set to improve by under 1% this year, marking the weakest annual rate since 2010, the IEA said in its Energy Efficiency 2020 report. This is far less progress than is needed for the world to deliver on its goals to tackle climate agency and expand energy access, the Paris-based agency said.

"Together with renewables, energy efficiency is one of the mainstays of global efforts to reach energy and climate goals. While our recent analysis shows encouraging momentum for renewables, I'm very concerned that improvements in global energy efficiency are now at their slowest rate in a decade," IEA director Fatih Birol commented. "For governments that are serious about boosting energy efficiency, the litmus test will be the amount of resources they devote to it in their economic recovery packages, where efficiency measures can help drive economic growth and job creation."

Source: IEA.

 The IEA estimates that energy efficiency improvements can deliver around half of the reductions in energy-related greenhouse gas emissions needed over the next two decades to put the world on track to meet its climate goals. But the pandemic has caused progress to stall, mainly because energy-intensive industries such as metals manufacturing and chemicals have taken less of a hit from the crisis as less intensive parts of the economy.

Government support is key to driving efficiency gains. But there is an imbalance in efficiency spending across different sectors, with most stimulus packages announced so far focusing on the buildings sector or on accelerating the shift to electric vehicles. In contrast, funding towards vehicle efficiency beyond electric cars and the penetration of super-efficient appliances has been limited.

There is a similar imbalance between different regions, with Europe accounting for 86% of announced expenditure and the rest split between the Asia-Pacific and North America regions.

“We welcome plans by governments to boost spending on energy efficiency in response to the economic crisis, but what we have seen so far is uneven and far from enough,” Birol said. “Energy efficiency should be at the top of to-do lists for governments pursuing a sustainable recovery – it is a jobs machine, it gets economic activity going, it saves consumers money, it modernises vital infrastructure and it reduces emissions. There’s no excuse not to put far more resources behind it.”