Industry is driving energy efficiency

Global energy intensity fell by 1.8 per cent last year, finds a new report. Industry is one of the drivers of this energy efficiency, while the transport sector is sorely lagging behind.

The world needs less and less energy to produce one unit of gross domestic product (GDP). Energy intensity has declined at an average rate of 2.1 per cent per year since 2010, a significant improvement over the average growth rate of 1.3 per cent between 1970 and 2010, writes the International Energy Agency (IEA) in its latest market report on energy efficiency.

In 2016 global energy intensity fell by 1.8 per cent, slightly below average. The world would have used 12 per cent more energy last year had it not been for energy efficiency improvements since 2000. This is the equivalent of adding another European Union in the global energy market.

Energy savings are not, however, distributed evenly across economic sectors.

The industrial sector has succeeded in reducing its energy intensity by nearly 20 per cent since 2000, and in some energy-intensive industries like aluminium smelting and cement manufacturing average efficiency has improved sharply.

The building sector, in contrast, has not yet made full use of its energy efficiency potential. While annual net building-related greenhouse gas emissions decreased from 2013 to 2016, buildings final energy consumption grew from 119 EJ in 2010 to 124 EJ in 2015. Increasing floor area growth, which is outpacing energy intensity reduction, is to blame for the rise in energy consumption.

Some countries, such as Denmark and Germany, are focusing on building envelope to drive energy efficiency, while others, like Japan and South Korea, see heating, ventilation and air conditioning (HVAC) technology as a key driver. The IEA also sees potential efficiency improvements of 10 to 20 per cent from appliances, equipment and lighting products that are already commercially available.

The IEA is particularly critical of the transport sector. While worldwide sales of electric cars and energy-efficient vehicles grew by 40 per cent in 2016, the popularity of sports utility vehicles is dampening the global rate of improvements in passenger vehicle fuel efficiency.

According to the IEA, only four countries had fuel economy standards for heavy-duty vehicles (HDVs) in 2016, although these represent over 40 per cent of all road oil consumption. More countries are looking into implementing fuel economy regulations to reduce HDV energy use.

Global energy efficiency as a whole is a rapidly growing market, and global investment in energy efficiency increased by 9 per cent in 2016 to $231 billion. Europe is responsible for the largest share of global investment at 30 per cent.

The market for global energy service companies expanded by 12 per cent to $26.8 billion in 2016. China has by far the largest market at over 60 per cent of global revenues, thanks to strong government incentives. Over 1 million people are now employed by energy service companies around the world.


Image credit: Northern Spark via Flickr

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