IEA: Energy efficiency improvements for 2020 ‘the weakest in a decade’

Despite nations investing in retrofitting and businesses looking to make energy savings amid lockdown restrictions, global progress on energy efficiency has slowed in 2020, according to the International Energy Agency (IEA).

The Agency had warned in 2019 that the global pace of progress in reducing primary energy intensity – its main metric to track energy efficiency – was insufficient to meet climate targets. Energy efficiency is not only a way to reduce emissions for businesses, regions and nations in isolation, but a necessity to pave the way for technologies like hydrogen.

Now, in its ‘Energy Efficiency 2020’ report, it has recorded the poorest rate of improvement in primary energy intensity since 2010. Efficiency is likely to be less than 1% higher at the end of December than it was a year ago.

The report predicts that investment in energy efficiency worldwide is likely to be down 9% in 2020, on a year-on-year basis. While many governments have upped investments in energy-efficient buildings, through programmes like the UK’s Green Homes Grant and the EU’s Green Renovation Wave, other nations have chosen not to, and the benefits of these schemes aren’t likely to come to fruition until 2021 or 2022.

Moreover, the recession has heavily impacted spending across the private sector and among consumer bases in developed nations. The IEA has seen large businesses spending less upgrading their buildings and purchasing low-emission vehicles in 2020. Progress building new, more energy-efficient buildings has also slowed. Some businesses have told the Agency that the payback periods on energy efficiency initiatives which are either planned or in-process could be up to 40% longer as a result of Covid-19.

The IEA also puts its findings partly down to the fact that some energy-intensive industries have been less affected by lockdown restrictions. Included in this cohort are the chemicals, mining and metals sectors.

“While our recent analysis shows encouraging momentum for renewables, I’m very concerned that improvements in global energy efficiency are now at their slowest rate in a decade,” the IEA’s executive director Dr Fatih Birol said.

“For governments that are serious about boosting energy efficiency, the litmus test will be the amount of resources they devote to it in their economic recovery packages, where efficiency measures can help drive economic growth and job creation.”

Net-zero transition

The IEA has repeatedly claimed that improving energy efficiency can deliver almost half of the reduction in energy-related emissions that is needed by 2040, if the world is to align with the Paris Agreement.

While the latest report notes an uptick in government support for energy-efficient buildings – more than 60% of the stimulus funding for energy efficiency went towards buildings or EVs – the IEA does highlight what it has described as multiple “untapped opportunities”.

The body would like to see governments doing more to incentivise fuel-efficient vehicles alongside EVs, and, in the EV space specifically, supporting the most efficient models. Nations are also broadly failing to ensure that appliances are super-efficient, beyond the EU.

Of the energy efficiency related global pandemic stimulus spent globally since March, 86% is concentrated in Europe. The remainder is mainly split between North America and Asia-Pacific, with no government support yet recorded for Africa and Latin America.

Sarah George