It is time to update our thinking about energy efficiency
Energy efficiency becomes even more important as we shift to a renewables-based economy, says Rasmus Abildgaard Kristensen from Danfoss
The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy
It is not magic, energy efficiency solutions are readily available right now
The UNFCCC Global Stocktake report released in September 2023 emphasised the urgency of honouring the Paris Agreement target of limiting global warming to 1.5℃. We are simply not on track yet.
The good news is that it is possible to reach our climate goals, and we do not need magic to achieve them. We already have the technology and the solutions, but action is needed.
We need an increased focus on energy efficiency policy implementation to strengthen energy security and keep the goal of limiting global warming to 1.5℃ within reach. Energy efficiency is, and always should be, the “first fuel” for clean energy transitions.
We have the required technology available and it is by far the quickest and most cost-effective carbon mitigation option.
DOUBLE UP
As Fatih Birol, at the International Energy Agency (IEA), has previously emphasised, doubling the rate of energy efficiency improvements and tripling renewable power capacity globally by 2030 is essential.
Most political and business leaders understand that building out new energy supply alone is not enough to secure true energy independence or to reach our global climate goals.
The IEA’s own findings demonstrate that these objectives will remain impossible without taking the necessary measures to reduce our demand through energy efficiency as well.
The IEA’s conclusions show that doubling efficiency improvement to above 4% per annum this decade could lower global energy demand by 190 exajoules (EJ), and CO2 from burning fossil fuels by almost 11 gigatonnes (Gt) by 2030, almost one-third of current global CO2 emissions. While global energy demand grew by 1% in 2022, this could have been almost three times higher without the current progress we have made on energy efficiency.
The next step that needs to be taken is to update the narrative around energy efficiency—and our policies—to reflect the role of energy efficiency in a future energy system based on renewables. Energy efficiency is so much more than reducing demand and it will become even more important as the clean energy transition accelerates. We call it energy efficiency 2.0.
EFFICIENT ELECTRIFICATION
What is energy efficiency in this updated narrative? It is using digital solutions such as the Internet of Things (IoT) and artificial intelligence (AI) to create the flexibility that our energy systems will need as the share of renewables grows. It is using electrification and sector integration to use our energy smarter, matching supply and demand.
A somewhat overlooked point is that we are not only electrifying because it allows us to use green power but also because electrification is energy efficiency in its purest form. An electric engine is considerably more energy efficient than an internal combustion engine, resulting in massive savings.
We also know that excess heat—from supermarkets, data centres, industry and wastewater treatment plants—in the EU corresponds to the total energy demand for hot water in residential and service sector buildings. Yet, it is mostly unutilised. In the Netherlands alone there is more excess heat potential than the demand for water and space heating.
One study shows that 11-12% of excess heat can theoretically be recovered. But if we do not act, we are letting the lowest-hanging fruit—and one of the greatest opportunities to increase energy security, affordability, and sustainability—slip straight through our fingers.
Excess heat not only has astonishing potential as an energy source at scale, but on a societal level, it can replace significant amounts of electricity or gas that are otherwise needed to produce heat. In this way, excess heat can help ease the transition towards a cleaner and more stabilised energy system.
SUSTAINABLE COOLING
Meanwhile, the growing demand for cooling in our homes, offices and businesses could drive one of the most substantial increases in greenhouse gas emissions we have ever seen. Energy efficiency also has a critical role to play in enabling a future with sustainable cooling.
District cooling is one of the most promising and efficient ways to cool and decarbonise buildings. Central cooling plants produce chilled water and supply it to buildings through an insulated underground piping network. District cooling is an extremely efficient way of cooling our cities.
This is not new technology and it is not magic. These solutions are readily available right now. In fact, Singapore has the world’s largest district cooling system and has reduced its energy bill by 40%, while also reducing the country’s emissions by the equivalent of 10,000 cars per year.
Put simply, the greenest energy is the energy we do not use. We have the technologies to reach our goals, now we just need the leadership to make it happen.
If you have a thoughtful response to the opinions expressed here or if you have an idea for a thought leadership article regarding an aspect of the global energy transition, please send a short pitch of 200 words outlining your thoughts and credentials to: opinion@foresightdk.com.