Fatih Birol and Dan Jørgensen call for energy efficiency focus in ‘low-trust’ world

EU Commissioner Dan Jørgensen and IEA Executive Director Fatih Birol urge governments to put energy efficiency at the heart of Europe’s response to competitiveness, affordability, security, and climate challenges.

“If we are honest with each other, quite too often in international settings, energy efficiency is a little bit forgotten and we mostly speak about renewables”, said Dan Jørgensen, the EU Commissioner for Energy and Housing. “And of course, I also think renewable energy is extremely important, but energy efficiency is just as important.”

If there was ever any doubt about Jørgensen’s commitment to energy efficiency, Fatih Birol swiftly dispelled that. Speaking to the audience at the opening of the 10th Annual Global Conference on Energy Efficiency in Brussels, he pointed out that the event happened to coincide with Jørgensen’s 50th birthday.

As a gesture of appreciation, Birol surprised Jørgensen with flowers and made sure the milestone didn’t go unnoticed. “I am sure, Dan, you will never forget your birthday with 100 countries from around the world celebrating…,” Birol said, smiling. “And please pass on our regards to your mom and thank her for giving birth to you.”

As it turns out, Jørgensen and Birol are good friends, to the point that Jørgensen joked: “I see him more than I see my mother these days. And I love my mother, but still… I like it.”

Aside from this joyful intermezzo, the tone of the opening of the IEA’s annual conference was serious because for both Jørgensen and Birol, energy efficiency is no light matter.

The energy leaders stressed that energy efficiency needs more political attention because it is at the centre of solving some of the main challenges that Europe, and many other parts of the world, are facing.

Affordability and competitiveness

The first challenge highlighted by Jørgensen is that of affordability and fighting energy poverty.

“You might think energy poverty is something you see in developing countries, but even in Europe, one in 10 Europeans is at risk. Last winter, 47 million people were not able to adequately heat their houses.”

According to the Commissioner, the focus on renewables to solve this issue has merit because they are cheaper. However, he said, “the potential for households and companies will be even bigger when we deploy known energy efficiency technologies. They do demand investments, but these investments pay back, and they pay back fast.”

The Commissioner illustrates his philosophy by sharing that on average, every euro spent on energy efficiency translates into €12 of savings for households in Europe.

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For industry, there are also significant gains, with every euro spent translating into €4 of savings.

This is especially noteworthy in the context of Europe’s competitiveness crisis, where “companies are struggling to compete because energy bills are too high”.

For Birol, who launched a special report on the role of energy efficiency in enhancing competitiveness in industries, cost reduction is one of the reasons why he is pushing for improved energy efficiency.

“To produce any good, the cost of energy is critical. And if you have the right efficiency policies and standards, you can bring the costs of energy down, and those companies will be in a competitive position through lower energy costs,” he said.

Energy security

When it comes to energy security, Jørgensen emphasised how the war in Ukraine has fundamentally changed Europe’s perspective on energy dependency.

“Had Russia closed the gas supply [at the time of the invasion of Ukraine], then we would have been in the middle of a recession and a terrible crisis for millions and millions of people. This was a very important lesson because it showed us that being dependent on energy from one source is not a very nice and sustainable place to be, especially not if that source is your enemy.”

Jørgensen said that this realisation led to a significant reduction in energy imports: “We used to get 51% of our coal from Russia, now 0%. We used to get 27% of our oil from Russia, now 3%. We used to get 45% of our natural gas, now 13%.”

According to Jørgensen, a clear signal has now been sent to Russia: “No more will we let you weaponise your energy against us, no more will we let you blackmail our countries, no more will we indirectly help to fill the war chest of the Kremlin.”

So, where does energy efficiency fit in?

Part of how Europe was able to become more independent, said Jørgensen, is not only through diversification of supply, but also through energy efficiency measures to reduce the use of gas.

“Now we are taking the final steps, the last 13%, which is around 36bcm of gas per year. Some people say, ‘How can you do that without the price increasing?’ Well, partly because we reduce our use of gas by 15bcm per year.”

“It is going fast in the right direction because of energy efficiency.”

For Birol, the role of energy efficiency in energy security is simple: “The more energy you use efficiently, the less energy you import, which means less reliance on other countries.

“The world is going through very unpredictable times. It is a low-trust world, and in a low-trust world, countries do choose secure energy choices, for energy security reasons mainly. And I believe energy efficiency is or should be one of the first policy options that countries need to look into.

“The tendency to use more and more domestic energy sources should include the most important domestic energy source, which is energy efficiency.”

Climate change

For Jørgensen, however, climate change is the biggest challenge.

“Sure, there is a war on our continent, but I am confident that there will be peace. Sure, we have strange relations across the Atlantic and trade wars are going on, but that will stabilise and we will find solutions. Unfortunately, climate change will continue to be the biggest challenge for all of us in the room for the rest of our lives. It is not something that might happen in the future, it is already here.”

Jørgensen referred to “catastrophic consequences” of climate change, such as droughts, floods and forest fires. “People are dying, so it is a moral imperative for us to address that challenge.”

He said that Europe is the continent where temperatures are increasing the fastest.

Speaking of temperatures, Birol surprised the room by stating that the main driver behind the “skyrocketing electricity demand” is not AI or electric cars, but the increasing sales of air conditioners.

“This is a human right, to have reasonable temperatures,” he said, but he also flagged a problem. According to the IEA’s research, the average air conditioner sold around the world is only half as efficient as the best ones available on the market.

“There is a major gap. If you were to improve the efficiency of the air conditioners, we would need less energy, have more money left in the pockets, and reduce emissions.”

On the topic of decarbonisation, Jørgensen said that energy efficiency measures in the EU alone can deliver 40% of the reductions needed.

“Improving energy efficiency in buildings alone can make them up to 60% less carbon intensive. And since buildings are 40% of our energy use, you see the potential is huge,” he said.

Not enough progress

Jørgensen received a clear mandate from the President of the European Commission, Ursula von der Leyen, to further push energy efficiency, among others, through the Energy Efficiency First principle.

He said that “we have a lot of progress in Europe and globally, but it is going too slow. We need to do more, and we need to do it faster”.

Birol used the opportunity to remind the audience of the COP28 commitment of 200 countries to double the global average annual rate of energy efficiency improvements from 2% to over 4% every year until 2030.

“Yet in the last two years, energy efficiency improvement was much slower than that. Challenges can be addressed [through energy efficiency] much easier than any other part of the energy system.”