Over the past 25 years, energy efficiency has played an enormous impact on economic growth, energy service, and carbon emissions, according to the newest Energy Efficiency Market Report by the International Energy Agency (IEA). The IEA “. . . works to ensure reliable, affordable and clean energy for its 29 member countries and beyond.” A list of its member countries can be found here. This article will breakdown the key points of the report, which will include avoided TFC, avoided volume and value of imports, growing markets, and key government players.
Avoided Total Final Consumption (TFC)
The report notes that IEA countries “. . . have enabled consumers in IEA countries to spend USD 5.7 trillion less on energy, while enjoying higher levels of energy service.” IEA countries have achieved these significant results through energy efficiency measures, mostly which have come within the last decade. In 2014 alone, over USD 550 billion in energy costs were avoided. In the report, energy savings are represented as total final consumption (TFC). TFC can be described as the amount of additional energy that would have been necessary to consume for power. Since 1990, energy efficiency has saved IEA countries 10% in TFC. The following graph depicts different energy sources and TFC since 1990.
As the report makes evident, electricity and gas have been the primary forms of energy saved.
Avoided Volume & Value of Imports
More efficient transportation vehicles, among other measures, have helped IEA countries avoid 190 million tons of oil equivalent (Mtoe), or approximately USD 80 billion. Germany benefited the most, avoiding 55 Mtoe (approximately USD 30 billion) in 2014, boosting Germany’s trade surplus by 12%. The following graph depicts how much natural gas, oil, and coal have been avoided for consumption in major IEA countries due to energy efficiency improvements.
Buildings as a Growing Market
In 2014, USD 90 billion was invested in energy efficiency in both residential and commercial buildings, whether as part of new construction or as energy efficiency retrofits. The top three investing countries were the United States (USD 23 billion), China (USD 18 billion), and Germany (USD 17 billion). A significant portion was invested in the residential sector in both China and Germany. “Global energy efficiency investment in buildings is projected to increase to over USD 125 billion by 2020, driven in part by expanding efficiency-targeted policies.”
Key Government Players
Local cities and governments who have played a pivotal role in the promotion of energy efficiency have strengthened energy efficiency policies. The Paris Climate and Energy Action Plan of 2007, for example, has saved approximately 130 gigawatts (GWh), which assisted in the development of 1,300 local jobs. On a local level, Massachusetts has invested USD 680 million in energy efficiency programs, since 2013. As a result, USD 2.8 billion in benefits were created by the Mass Save program—Massachusetts’ primary efficiency program—helping create over 65,000 jobs in the energy efficiency industry.
Final Thoughts
As the report makes evident, IEA countries are not only investing to help reduce greenhouse gas emissions globally, they are also investing in energy efficiency because it makes economic sense, with the added bonus of it helping protect our environment.
View the full report.