Why energy efficiency is the surest route to halting global warming

When it comes to protecting the environment, using energy more efficiently is at least as important as embracing renewables, says the IEA's Laura Cozzi.

Desk

Laura Cozzi hates wasting energy.

That’s why she religiously monitors and limits electricity use at her Paris home using a smart phone app and connected thermostat.

It may seem a small gesture but as Cozzi argues, when it comes to energy efficiency, a little can go a very long way. And she should know.

That’s because beating the drum for efficiency improvements is what Cozzi does for a living as a principal analyst at the International Energy Agency – the globe’s leading authority on energy consumption.

There, she leads a group which models climate change and maps energy scenarios – analysis that informs the thinking of governments and corporations worldwide.

Cozzi’s team is an especially important force in helping the world shift to a more sustainable energy mix, as energy efficiency can achieve much more than building wind farms or solar installations ever could.

Her research shows that the efficient use of energy in everyday activities like heating a home, lighting an office building or manufacturing goods in a factory is estimated to have saved enough energy to power Japan, the world’s third largest economy, for a full year.

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Energy generation is the biggest source of greenhouse gases, accounting for 60 per cent of total CO2 emissions. Yet energy efficiency does not get nearly enough attention in discussions about how to halt global warming, Cozzi says.

“We call energy efficiency the first fuel because all countries have it as a clear energy resource to use. It’s an instrument to achieve many policies and economic goals. It’s a means to reduce emissions,” she tells mega.

Improving energy efficiency essentially means using less energy to achieve the same outcome. It often involves using energy-saving technology that “generates” excess power than can then be used for other purposes. Its deployment can deliver huge energy savings.

The efficient use of energy in everyday activities has, the IEA estimates, saved some 450 million tonnes of oil equivalent in 2015. These efficiency savings also cut world energy spending by at least USD500 billion in the same year.

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LED: a bright idea

One area where energy efficiency is having dramatic effect is lighting.

Thanks to a combination of tighter regulation and a sharp decline in the cost of energy-saving bulbs, green lighting is becoming ubiquitous in homes, offices and factory floors across the world.

Some 63 per cent of energy used in lighting is subject to mandatory energy efficiency standards in 2015, up from just 2 per cent in 2000. In tandem, the cost of LEDs has fallen by 80 per cent in the six years to 2016, encouraging a greater take-up.

The energy savings have been remarkable.  In the five years to 2015 alone, LED adoption has saved more than 120 terawatt-hours of electricity. That is equivalent to over half what the state of California generates every year.

“Technology is becoming cheaper. (The 80 per cent fall in) LED costs make an economic case completely different,” Cozzi says.

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Clear business case

And there is no reason why the success of LED cannot be repeated by other energy-efficient building technologies. Products such as smart insulation and windows, HVAC (heating, ventilation and air conditioning) and control systems offer similar energy saving potential as green light bulbs, according to the IEA.

A recent study by the US Environmental Protection Agency found consumers using programmable thermostats like the ones Cozzi has installed at home reduce energy usage by up to 30 per cent. According to Nest, the Google-owned maker of smart thermostats, its consumers have saved more than 1.4 billion kilowatt-hours over the past six years, enough electricity to power more than 135,000 US homes for a year.

“From a consumer perspective, you are not changing your lifestyle. Yet such technology has an immediate impact on energy consumption. ” Cozzi says. “There is a clear economic case for this as consumers see material savings and a corresponding reduction in energy use.”

Of course, making a home or factory energy efficient often requires investment up front – householders need to buy smart thermostats and manufacturers have to invest in more efficient appliances.

However, new technologies are helping to reduce such costs, and to a point where the payback can materialise in a matter of a few years.

Nest, for example, says that its thermostat pays for itself in less than two years from savings from heating and cooling costs.

On the road

Importantly, energy efficiency is not only cost effective – it can also hasten the world’s transition to a cleaner future powered by renewables.

For instance, in the US, wherever energy efficiency has become part of the regulatory set-up, it typically encourages greater use of alternative energy at the expense of fossil fuels.

The link between energy efficiency and renewable use is perhaps most obvious in transport, where more efficient vehicles are replacing gas-guzzling ones.

Of all total investment in energy efficient technology in the transport industry in 2015, a quarter of it,  or USD64 billion, flowed mainly to the light goods vehicles sector, one of the main sources of CO2 emissions.

Most of this investment was focused in three areas in particular:  improving aerodynamics, developing less resistant, lighter tyres and introducing electric vehicles (EVs).

EVs have perhaps the biggest environmental impact as an electric engine is about three times more efficient than one powered by petrol.

What’s more, Cozzi and her colleagues at the IEA have found, the electricity required for EV motors can be generated from renewable energy sources, making them even more environmentally friendly.

With EVs becoming increasingly popular among both businesses and consumers – sales rose by 70 per cent in 2015, putting more than a million of such vehicles on the road – the power savings could be substantial.

The number of electric cars on the road has reached the 2 million milestone in 2016. The IEA says the EVs sold in 2015 – over half a million – will save more than 33 million barrels of oil consumption over their lifetimes. That might not sound much given that it amounts to less than 0.01 per cent of total oil demand. Yet the figure could rise quickly if EV adoption continues at its present pace.

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On the factory floor

Electric motors of a different kind are also helping industry become energy efficient.

Every factory in every corner of the world uses electric motors of one form of another, whether they’re compressors, conveyors and pumps. So ubiquitous are these devices that they consume almost 70 per cent of all the electricity used in manufacturing.

If these machines could be made more efficient, the IEA says, the energy savings would begin to add up very quickly.

Traditional motors tend to always work at full speed, leading to significant loss of energy. But thanks to the introduction of new regulations, industries are being encouraged to replace these devices with new ones that work at variable speeds. Variable-speed motors reduce electricity consumption, and can turn 90 per cent of the electricity that powers them into mechanical energy.

While the process to replace existing motors can be slow, it could bring greater energy efficiency gains and savings in the coming years.

In China, if you are not energy efficient you cannot become competitive

Experts point out that benefits of energy efficiency come with a caveat. It’s the phenomenon known as the rebound effect, where improving efficiency may save less energy than expected because the more efficient something becomes, the more it is used, cancelling out the benefit.

But there’s no doubt that more can be done as only a third of potential energy efficiency savings have been realised at a global level – sometimes because there’s not enough information, or end-users simply do not care.

“The scope to improve is huge,” Cozzi says. “Regulation does play a big role. It’s about making consumers either aware or pushing for the least efficiency technology to be kicked out.”

Cozzi says China is playing an outsized role in driving energy efficiency, albeit through radical steps such as closing of most inefficient plants in the energy-intensive industry sector. Through an efficient use of energy, the world’s second largest economy managed to avoid as much as 1.2 billion tonnes of CO2 emissions in 2014, equivalent to the total emissions of Japan.

“China is already playing a huge role which is not well understood. It’s increasingly becoming a competitiveness issue. In China, if you are not energy efficient you cannot become competitive.”

It may be the “invisible” fuel but energy effiency’s impact on the planet is anything but.