What is energy efficiency?
Energy efficiency refers to the set of actions that consist in limiting the energy needs of transport, buildings, factories, etc., the objective being to reduce energy consumption. Examples include improving the energy performance of buildings, reducing the size of vehicles and optimising the supply chain. In short, it covers everything that can contribute, on all levels and in all possible ways, to reducing the amount of energy we consume.
Energy efficiency, the No. 1 lever for decarbonization
In our 2020 Energy Transition Dashboard published in October (see box below), our experts present two major paths towards reducing greenhouse gas emissions in order to limit global warming to +2°C by 2100: reduced energy consumption on the one hand, and energy decarbonization* on the other. The main levers to achieve this include the development of renewable energies and the improvement of energy efficiency, with the latter offering the greatest potential: it can reduce global energy consumption by more than a third!
Significant room for improvement
However, not nearly enough progress has been made in the area of energy efficiency. Nonetheless, over the past two decades, energy consumption has fallen by around 20% in all major economies, although the pace has slowed in recent years on a worldwide scale, with investments stagnating in 2019. Yet implementing energy efficiency solutions demands massive investment.
Substantial untapped potential
The Dashboard puts forward reasons for this slow pace. Energy efficiency implies improving equipment and innovating in order to reduce energy intensity. However, energy prices are currently low, which does not encourage economic players to invest in the long term to reduce their energy consumption. The transport and construction sectors are particularly concerned, since they are high emitters of greenhouse gases. Nevertheless, the paths towards improved energy efficiency are clearly defined and promising: for example, the thermal renovation of buildings, the development of vehicle hybridization, reducing the size of vehicles, improving the efficiency of internal combustion engines, etc.
While the EU is beefing up its regulatory arsenal to improve energy efficiency**, this is not yet the case in all countries around the world. Finally, to speed up the transition to carbon neutrality, it is essential that this lever be used in conjunction with the development of renewable energies and the generalisation of energy sobriety for the population as a whole.
>> Find more information about energy efficiency on pages 48 and 49 of the Energy transition dashboard.
*Decarbonization refers to the action of removing carbon dioxide from a substance. By extension, the word is used to describe the process of trying to move away from the use of fossil fuels such as oil, coal or gas and to replace them with renewable, carbon-neutral energy.
**near-zero energy building, Green Deal