Energy Efficiency 2019

The authoritative tracker of global energy efficiency trends
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In this report

Since 2015, improvements in global energy intensity have been weakening each year. Energy Efficiency 2019 examines the reasons for this slowdown, which has major implications for consumers, businesses, governments and the environment.

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.

Key findings

Global improvements in primary energy intensity, 2000-2018

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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.

Global energy productivity bonus, actual and if energy efficiency had improved at 3%

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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.

Global production of crude steel, 2010-2018

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Industry and weather

In terms of demand, energy-intensive industries in countries including China and the United States increased their share of industrial production and pushed up demand for all primary energy fuels.

North America monthly temperature anomalies and US residential gas demand, 2018 compared to 2016-2017 average

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Weather also played a role: In the United States, a cooler winter and a warmer summer drove up energy use for both heating and cooling. In Europe, a milder winter cut gas demand for heating, a major factor behind a 2% improvement in energy intensity, up from 1.4% in 2017.

On the supply side, after three years of flat growth or decline, coal power generation increased in 2017 (3%) and 2018 (2.5%) to supply stronger electricity demand growth. More fossil fuel-based electricity generation increases primary intensity because energy is lost when these fuels are converted from primary to final energy.

Fuels share of annual electricity growth and primary energy intensity improvement, 2014-2018

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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.

Net energy savings from technical efficiency and structural change in major economies, 2011-2018

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Factors influencing passenger transport energy use, 2015-2018

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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.

Factors influencing residential buildings energy use, 2015-2018

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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.

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.

Share of final energy use covered by mandatory efficiency policies, 2010-2018

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Investments in energy efficiency by region, 2014-2018

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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.
Efficiency continues to deliver benefits

In terms of energy security, importing countries reduced their exposure to oil market instability through technical efficiency improvements. In 2018, efficiency improvements since 2000 reduced oil imports in the world’s major economies by over 165 mtoe, similar to the combined annual primary oil demand of Germany, Australia and Belgium.

This had signifcant financial benefits for oil importers. For example, in 2018 Japan spent $20 billion less on imported oil thanks to a 20% reduction oil imports due to efficiency improvements since 2000. China reduced spending on imported oil by a similar amount, as efficiency gains since 2000 cut oil imports equivalent to 10% of total imports.

Percentage of oil import reduction due to efficiency gains in selected countries, 2000-2018

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Technical efficiency gains continue to deliver cuts in energy-related emissions. Between 2015 and 2018, technical efficiency improvements reduced energy-related carbon emissions by 3.5 gigatonnes of carbon dioxide (GtCO2), roughly the equivalent of the energy-related emissions of Japan over the same period.

This is helping to bring the world closer to an emissions trajectory consistent with achieving global climate change goals.

Energy-related greenhouse gas emissions, with and without technical efficiency gains, 2000-2025

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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. 

How digitalization can improve energy efficiency

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.

Policy recommendations

Policy could accelerate the adoption of digital technologies for energy efficiency but policy focused on digital technologies for efficiency is still rare.

The IEA has identified a set of critical policy considerations within its new Readiness for Digital Energy Efficiency policy framework. The framework is designed to ensure the benefits of digital energy efficiency are realised through policies that address a range of issues: from balancing data accessibility with data privacy, to helping remove regulatory barriers to innovation.

  • Improve access to energy-related data
  • Ensure adequate protection from cyber security and data privacy risks
  • Strengthen trust in digital technologies
  • Ensure energy markets value the services provided by digital energy efficiency
  • Ensure equitable access to digital technology and infrastructure
  • Increase digital skills and plan for job market transformation
  • Minimise negative environmental impacts
  • Encourage technology and business model innovation