The International Energy Agency brought together global energy and climate leaders in France this week for a major ministerial meeting on energy efficiency, with a new IEA analysis showing that the world needs to double progress on efficiency between now and 2030 as part of efforts to improve energy security and affordability while keeping the goal of limiting global warming to 1.5°C within reach.
The IEA’s 8th Annual Global Conference on Energy Efficiency gathered 700 people from more than 80 countries, including over 30 ministers and 50 CEOs, in Versailles to address how to accelerate energy efficiency improvements. The event was co-hosted by France’s Minister for Energy Transition Agnès Pannier-Runacher and IEA Executive Director Fatih Birol, being organised in partnership with Schneider Electric.
A special briefing report published for the Global Conference – Energy Efficiency: The Decade for Action – highlights that ramping up annual energy efficiency progress from 2.2% today to over 4% annually by 2030 would deliver vital reductions in greenhouse gas emissions and at the same time create jobs, expand energy access, reduce energy bills, decrease air pollution, and diminish countries’ reliance on fossil fuel imports – among other social and economic benefits.
Energy efficiency investment in 2023 is expected to reach record levels, despite a slowdown in year-on-year growth as the high cost of capital weighs heavily on potential new projects. Under current expected and announced policies, efficiency-related investment is projected to rise by a further 50%. However, to see annual progress double, investments in the sector must increase from USD 600 billion today to over USD 1.8 trillion by 2030.
“Today, we are seeing strong momentum behind energy efficiency. Countries representing over 70% of the world’s energy consumption have introduced new or improved efficiency policies since the global energy crisis began over a year ago. We now need to push into a higher gear and double energy efficiency progress by the end of this decade. I believe this major global conference, which I’ve been delighted to co-host with French Minister Pannier-Runacher, can be a vital impetus for accelerating ambition and action,” said IEA Executive Director Fatih Birol.
“Optimizing how we consume energy is the priority of how we tackle the climate-and-energy crisis. We have all the ingredients. What we don’t have is time: We simply can’t let more time go by before we deploy the power of electrification and digital energy-efficiency technologies to the fullest,” added
Chairman of Schneider Electric Jean-Pascal Tricoire.
Policy will have a critical role to play in whether the world delivers on energy efficiency in the short, medium and long term. The RePowerEU plan in Europe, the Inflation Reduction Act in the United States and Japan’s Green Transformation (GX) initiative are a few examples of policy makers making renewed efforts to deliver on the energy efficiency agenda. While various emerging and developing economies – including India, Chile and South Africa – have enacted progressive measures to bring energy efficiency to the fore.
The new IEA report shows how doubling energy efficiency efforts can also deliver positive knock-on effects for society. Today, the sector employs tens of millions of people worldwide. With increased ambition, energy efficiency activities could lead to another 12 million jobs globally by 2030. Importantly, more efficient and lower energy demand supports faster progress towards universal access to modern and affordable energy in emerging and developing economies. The shift toward efficient electrification through the phasing out of the traditional burning of biomass such as charcoal and wood for heating and cooking also brings multiple benefits in terms of improved air quality and health.
To continue its support for stronger action on efficiency, the IEA has developed and updated its policy toolkit for governments. The toolkit comprises two parts: The first is 10 strategic principles, based on the recommendations of the Global Commission for Urgent Action on Energy Efficiency, that bring together key learnings from global experience on how to maximise the impact of all energy efficiency policies and programmes. The second is a set of sectoral policy packages that highlight key policies available to governments, and how they can be integrated into an effective coherent suite of policies and actions to deliver faster and stronger efficiency gains. The 2023 policy toolkit includes two new policy packages on clean cooking and finance as well as updates to the existing packages.