The scenario for an energy efficient world

Energy Efficiency 2018 is the most comprehensive at the present time analysis of the current and future global trends in the energy efficiency sphere. It presents the results of researches on the possibilities for the enhancement of the global energy efficiency level up until 2040.  

In the opinion of IEA representatives, the Agency’s 170-page report is, in the essence, a list of recommendations for the authority bodies. In addition to conclusions on the global trends, the report presents a detailed analysis of the actions on energy efficiency for six developing countries: Brazil, China, India, Indonesia, Mexico and South Africa. Despite the fact that Russia belongs to the five leading energy consuming countries, it is only marginally mentioned in the report, in the list of the major industrial energy consumers. This could be stipulated by that Russia could not boast about any positive dynamics in the sphere of energy efficiency: the state programs in this sphere have not reached the target indexes and are not reinforced with any specific plans and budget lines.   

According to the IEA report, the global power demand went 2% up by 2017. At that, the global energy intensity (i.e., energy consumption per unit of production output) has reduced by only 1.7%, which is the most modest yearly index in this decade.  

However, the report pointed out that the demand for the development in this sphere is huge: in particular, according to the IEA report, the programs for the energy efficiency enhancement since 2000 “compensated more than one third of the increase in the scope of activities connected with energy consumption.”  Experts of the International Energy Agency are sure that the global energy efficiency enhancement since 2000 has compensated 12% of power consumption.

One of the IEA experts’ conclusions says that the enhancement of energy efficiency might provide for the double economic value under the same energy intensity conditions. At that, the humanity might reduce the annual “global power bill” by $500 billion and diminish utilization of fossil fuels and greenhouse gas emissions.

In its report, the International Energy Agency outlined the “Efficient World Strategy”, in which energy efficiency is served as practically the panacea for solving numerous problems of the humanity. The experts indicated the biggest opportunities for the enhancement of energy efficiency and formulated the policy measures necessary to implement for their realization.  

The biggest analysts’ hopes are invested in the transportation sector: it is the most fast-growing sector across the globe. The experts make forecasts regarding the huge potential for the energy efficiency enhancement in the sphere of municipal transport and also focus on the aviation. Another important direction indicated in the IEA Report is energy efficiency of buildings; at that, the entire complex of materials, lightening, heating, cooking and behavioral concepts is subject to energy efficiency testing.  

According to the “Energy Efficient World” scenario, by 2014, the total footage of all buildings in the world will increase by 60%, while the population of the planet will go up by 20% and the total Gross Domestic Product (GDP) will double. However, in the energy efficient world, the power consumption will increase insignificantly, which the greenhouse gas emissions will go down by 12%.   

In order to implement the Strategy of the Efficient World, investments in energy efficiency should go up by more than USD 584 billion a year until 2025, and then by nearly $1.3 trillion per year for the period from 2026 till 2040, authors of the Report claim. However, the expenditures will prove to be economically efficient and bring profit three times as much.  Also, IEA experts claim that energy efficiency growth would allow the world countries to gain doubled economic profit from the same amounts of power that are consumed now, in 2018.

As for the financial provision for the Strategy of the Energy Efficient World, IEA analysts propose to use new and already probed business models. For example, utilization of renewable power in the residential sector introduced through using “green bonds” market and energy service agreements is, in their opinion, a very efficient mechanism.

“Only a part of the world states possess various energy resources (oil, gas, wind, solar energy or hydro power energy), but absolutely all countries have underdeveloped energy efficiency potential,” says the executive director of the IEA, Dr. Fatih Birol. “The efficiency could facilitate economic development, reduction of greenhouse gas emissions, and enhancement of energy safety of all countries. Our research shows that proper policies in the energy efficiency sphere could help the world to accomplish more that 40% of greenhouse gas emission reduction on the basis of presently available technologies. Thanks to the most important role of energy efficiency in the development of safe and sustainable future, IEA considers it as the “primary fuel” and will facilitate best practices exchange between the developed and developing economies in this sphere in all possible ways.” 

Through its recently launched online energy efficiency platform, IEA provides data and analytics for policymakers.   In addition, in partnership with the European Investment Bank, at the beginning of 2019, the IEA is launching a new initiative, which aims to bring together world leaders of international financial institutions and help them find options for attracting finance for energy efficiency enhancement.

All the conclusions that the authors of the IEA Report made could be a guide to action for Russia. Our energy consumption in the industry is one of the highest in the world: on the list of energy efficiency per unit of GDP we are close to Ukraine, Taiwan and Uzbekistan. Apparently, this could not be interpreted as progress. At the same time, the country is striving for the economic growth which is absolutely unfeasible without the power.  “It is a short-sighted approach to keep bidding on the oil and gas,” such was the conclusion of IEA analysts. And this conclusion could not be more relevant for Russia, a country having all the prerequisites for energy efficiency enhancement and exploitation of renewable power sources.  

“’The energy efficiency is the biggest, cleanest, and cheapest source of power:’ representatives of Russian environmental organizations have been holding  their actions under this slogan for already several years,” Olga Senova, Director of Climate Secretariat of the Russian Social and Ecological Union tells. “I mean the true energy efficiency, not just the words, must become the priority of the state Russian policy. We need strengthening of the state support, establishment and financing of a roadmap for the energy efficiency measures on the national and regional levels. This is the way to sustainable development, economic growth with habitat conservation and protection of environmental resources.”