IEA report released ahead of Conference on Energy Efficiency in France

Agnes Pannier-Runacher

The International Energy Agency (IEA) has released a report ahead of a ministerial meeting on energy efficiency in France this week.

The gathering aims to unite global energy and climate leaders to address the pressing need for doubling progress on efficiency by 2030. This effort is crucial for enhancing energy security, affordability, and achieving the target of limiting global warming to 1.5°C.

The 8th Annual Global Conference on Energy Efficiency, organized in partnership with Schneider Electric, is taking place in Versailles. Over 700 participants from more than 80 countries, including 30 ministers and 50 CEOs, are attending to discuss ways to accelerate energy efficiency improvements.

France’s Minister for Energy Transition, Agnes Pannier-Runacher, and IEA Executive Director, Fatih Birol, are co-hosting the event.

IEA has released a special report titled Energy Efficiency: The Decade for Action. The report emphasizes the significance of increasing annual energy efficiency progress from the current 2.2 percent to over 4 percent by 2030.

Despite a slowdown in growth due to capital costs, energy efficiency investment in 2023 is projected to reach record levels. Under existing policies, investment related to efficiency is expected to increase by 50 percent. However, to achieve the target of doubling annual progress, investments in the sector must rise from the current USD 600 billion to over USD 1.8 trillion by 2030.

Agnes Pannier-Runacher expressed her belief that energy savings and efficiency are straightforward and vital responses to both the energy and climate crises. She acknowledged the importance of co-hosting the global conference with the International Energy Agency to strengthen the focus on energy efficiency worldwide.

Fatih Birol noted the momentum behind energy efficiency and highlighted that countries representing more than 70 percent of global energy consumption have implemented new or improved efficiency policies since the onset of the global energy crisis.

The new report by the IEA highlights how doubling energy efficiency efforts can have positive ripple effects on society. The energy efficiency sector currently employs tens of millions of people globally, and with increased ambition, it could generate an additional 12 million jobs by 2030.

Enhanced energy efficiency and reduced energy demand contribute to faster progress in achieving universal access to modern and affordable energy in emerging and developing economies. Shifting toward efficient electrification by phasing out traditional biomass burning for heating and cooking also brings multiple benefits, including improved air quality and better health outcomes.

In 2022, global energy efficiency progress reached 2.2 percent, which is twice the average of the previous five years.

Global energy demand increased by 1 percent in 2022. However, without progress in energy efficiency, this growth would have been nearly three times higher.

Energy efficiency policies have strengthened worldwide in the past year. Countries representing over 70 percent of global energy consumption have introduced new or enhanced efficiency policies since the beginning of the global energy crisis.

Governments have taken measures to support energy consumers. More than 25 countries launched significant awareness campaigns to promote energy reduction, and over USD 900 billion has been spent to protect consumers from rising energy costs.

Sales of key efficiency technologies are soaring. Heat pump sales rose by over 10 percent globally in 2022 and nearly 40 percent in Europe. Electric vehicle (EV) sales accounted for 14 percent of global car sales in 2022 and are projected to reach 18 percent in 2023.

Investment in efficiency is expected to reach record levels in 2023, surpassing USD 600 billion. However, the growth rate is slowing due to increased capital costs. Recent trends

Doubling the rate of efficiency improvement to over 4 percent annually by 2030, aligning with the IEA’s Net Zero Scenario, would result in a 190 EJ reduction in global energy demand and nearly 11 Gt decrease in CO2 emissions from fuel combustion by 2030. This accounts for almost one-third of current global energy consumption and emissions.

Accelerating the implementation of existing policies is crucial. If all announced efficiency commitments are swiftly and fully implemented, combined with existing policies, they will deliver three-quarters of the doubling goal by 2030.

Accelerating efficiency progress brings additional benefits. Achieving the goal of doubling efficiency progress by 2030 will enhance energy security, create an additional 12 million jobs, and provide electricity access to over 800 million people.

Triple the annual investment for an energy-efficient future. To achieve the doubling rate of progress, annual efficiency-related investment must triple from the current USD 600 billion to USD 1.8 trillion by the end of the decade.