Energy Efficiency 2019
The authoritative tracker of global energy efficiency trends
"The historic slowdown in energy efficiency in 2018 – the lowest rate of improvement since the start of the decade – calls for bold action by policy makers and investors."
Fatih Birol, Executive Director, IEA
Energy efficiency has tremendous potential to boost economic growth and avoid greenhouse gas emissions, but the global rate of progress is slowing – a trend that has major implications for consumers, businesses and the environment. Energy Efficiency 2019 examines in detail the reasons for this recent deceleration in efficiency progress and also includes a special focus on the ways in which digitalisation is transforming energy efficiency and increasing its value.
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Global energy efficiency improvements are slowing
In 2018, primary energy intensity - an important indicator of how much energy is used by the global economy - improved by just 1.2%, the slowest rate since 2010.
This was significantly slower than the 1.7% improvement in 2017 and marked the third year in a row the rate has declined. It was also well below the average 3% improvement consistent with the IEA's Efficient World Strategy, first described in Energy Efficiency 2018.
World World 2000-09 1.3763079 0 2010-14 2.0635666 0 2015 2.9325519 0 2016 2.526278 0 2017 1.7152439 0 2018 0 1.2112331
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... which is a lost opportunity for the global economy
The 1.2% improvement in energy intensity equated to around $1.6 trillion more GDP for the amount of energy used compared to 2017.
However this figure could have been $4 trillion – an amount greater than the size of the German economy – had energy intensity improved at 3% every year since 2015.
Actual energy productivity bonus Additional bonus from 3% energy intensity improvement rate 2015 3.580101459 0.0848883 2016 3.184402034 0.618242223 2017 2.242147802 1.753541641 2018 1.639084237 2.573637345
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2 – Broader trends
Longer-term structural factors are also playing a part in the slowdown. While technologies and processes are becoming more efficient, structural factors, like changes in transport modes and more building floor area per person, are dampening the impact of these technical efficiency gains on energy demand, and slowing global energy intensity improvements.
Technical efficiency Blank Structural change Structural change 2012 -2.013640392 -2.013640392 -1.850237531 2013 -2.143622194 -2.143622194 -2.288356859 2014 -3.477336422 -2.717758268 -0.759578154 2015 -6.436045349 -5.802572961 -0.633472388 2016 -6.401652216 -5.840509293 -0.561142923 2017 -5.301040499 -4.468070144 -0.832970355 2018 -3.648249616 -1.927171497 -1.721078119
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In transport, despite improvements in vehicle efficiency, energy use continues to grow.
Amongst other factors, sales of new, more efficient vehicles have slowed, consumers prefer larger cars, and typical vehicle occupancy rates have fallen.
In residential buildings, structural changes have consistently matched or outpaced efficiency gains since 2014.
These include increased device ownership and use and a significant growth in average per-capita residential floor area in all economies.
3– Policy progress and investment are flat
The coverage of mandatory efficiency policies increased in 2018, but this was almost exclusively due to existing policies. Meanwhile the strength of mandatory policies increased by less than 0.5%, slightly higher than the previous two years, though still below the five-year historical average, indicating more can be done to ensure mandatory policies are effective. The coverage and strength of energy efficiency obligation programmes remained largely unchanged.
Covered Uncovered 2010 21.77624507 78.22375493 2011 26.53768965 73.46231035 2012 27.8627322 72.1372678 2013 28.82992375 71.17007625 2014 29.89775547 70.10224453 2015 30.87012792 69.12987208 2016 32.13937005 67.86062995 2017 33.21860604 66.78139396 2018 34.6770481 65.3229519
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Levels of investment targeting efficiency have remained largely unchanged since 2014.
At $240 billion, incremental efficiency investments across the buildings, transport and industry sectors were about 0.6% higher in 2018 than in 2017, but still well below the levels required to capture the cost-effective opportunities available.
China Europe North America Other 2014 49.04559096 72.17559348 47.1866515 68.03776324 2015 56.90114005 73.52854017 53.62668643 47.26603596 2016 50.24218858 78.35943106 58.16327269 50.97979015 2017 60.33499281 76.00079137 48.24163952 54.84903767 2018 61.14619174 76.4854785 46.80521683 56.54068587
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Modernising energy efficiency through digitalisation
Digitalisation is modernising energy efficiency and increasing its value – and it can unlock greater efficiency if barriers are removed.
At a time of deep change in the energy system, with larger shares of intermittent generation being added to electricity systems, digitalisation is making demand-side energy efficiency a more valuable resource than in the past. This is because in addition to providing gains in end-use efficiency, many digital technologies also provide other services, such as flexible load, that increase the efficiency of the entire system.
While end-use efficiency has always had system benefits, digitalisation allows for these benefits to be measured and valued more quickly and more accurately.
Returning the world to a less energy-intensive pathway will require new approaches to boosting energy efficiency. Digitalisation offers opportunities for gains in both end-use and system energy efficiency– if the right policies are in place.