World Energy Investment 2020

The energy industry that emerges from the Covid-19 crisis will be significantly different from the one that came before
Data and numbers

Energy end use and efficiency

Global investment in energy efficiency by sector, 2014-2019

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Trends in sectoral indicators in the United States, 2000-2018

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Trends in sectoral indicators in the European Union, 2000-2018

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Trends in sectoral indicators in China, 2000-2018

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A total of USD 250 billion was invested in energy efficiency across the buildings, transport and industry sectors in 2019, the same level as the previous year. While there were signs of new activity in some areas, annual changes for each sector remained moderate. Energy efficiency investment is not enough to meet sustainability goals and reduce the effort required from energy supply. Primary energy intensity needs to drop by an average of 3.6% annually to deliver on climate goals. In 2019, the change was 2%, roughly the same as 2018 (IEA, 2020a).

Policies and energy bills play a big role in influencing capital expenditure decisions to reduce future energy demand. However, overall consumer and business spending serve as the primary drivers. In this light, the global economy was already slowing in 2019 with weakening trade, investment and manufacturing. Global GDP growth dipped from 3.5% in 2018 to 2.9% in 2019. Slower Chinese growth spilled over to other emerging economies, and was amplified by global trade tensions. India’s construction growth rate more than halved to 3%. Current weakness in consumer demand and supply chain disruptions have now brought new challenges to already fragile sectors.

The buildings sector is still the largest destination of efficiency spending. After faltering in 2018 in response to reduced government support in Europe, it grew 2% in 2019 to over USD 150 billion.

Transport efficiency investment fell in 2019, as global car sales fell and with the most efficient cars trailing the wider market. A tussle between electrification and preferences for larger cars has dampened fuel economy improvements in major vehicle markets, as higher sales of internal combustion engine SUVs has more than offset the gains by EVs (see below). Spending on more efficient road freight vehicles stabilised despite a drop in the overall market (including a decline in total sales in China) as fuel economy standards began to make an impact. Still, freight vehicles generally have higher upfront costs, making purchases hard to justify for smaller enterprises despite lower lifetime fuel costs.

Energy efficiency investment may fall by over 12% in 2020, mostly due to the 6% assumed decline in global economic growth, and then potentially in response to less available capital for efficiency projects and lower energy prices, especially for oil. During the economic crisis a decade ago, key indicators for buildings, transport and industry fell by more than the drop in GDP in Europe and the United States. In Europe, a 4% dip in GDP in 2009 paired with a 10% drop in vehicle sales, manufacturing value-added and construction value-added. US trends were similar, with a bigger impact on already declining vehicle sales. The recovery, especially in construction, was slow. The severity of this year’s downturn means that China may be impacted more than a decade ago, with knock-on consequences for the global pace of recovery.

Policies provide a buffer for efficiency investments, and the robustness of mandates and incentives will serve as crucial factors in the uptake of efficient goods over the next two years. Preferential support for efficient vehicles and buildings in rapidly deployed economic stimulus plans could help shore up economies and moderate spending declines. The energy intensity of the economy will also be influenced by any changes to mobility and work triggered by this crisis. Some changes will raise efficiency, while governments could help to mitigate negative impacts of others, such as a lowering of urban density.

Global investment in energy efficiency in the buildings sector rose 2% to approximately USD 151 billion in 2019, marking a return to steady growth after stabilising in 2018. However, the trend reflects a two-speed market with stronger activity in emerging economies, especially China, and weaker markets Europe and North America.

Broadly, two factors determine buildings efficiency investment. First, there is the overall construction capital spending on new buildings and refurbishments. Second, there are policies seeking to direct more of this capital spending to new buildings with energy performance above buildings codes and to encourage efficient refurbishments of the existing stock, including energy-using equipment such as heating systems. In Europe and North America, the refurbishment market is dominant.

The construction market overall grew by nearly 5% to USD 5.9 trillion in 2019, a slowdown compared with the robust rate in 2018. Activity moderated across key areas including China, the United States, Western Europe, the Middle East and Australia. Efficiency investment growth is therefore not keeping pace with activity directed towards buildings globally, potentially storing up challenges for addressing less efficient building stock during its operational lifetime of many decades.

Construction activity is expected to further weaken and decline in 2020, hurting buildings efficiency investment. Still, the cumulative effect of policies around the world may help to protect energy efficiency construction projects from the worst impacts of the downturn in some countries. In 2019, new or strengthened support for buildings efficiency investment was advanced in Canada, Norway Spain and Switzerland.

In 2019, two-fifths of the buildings efficiency investment was in Europe, where energy efficiency investment growth has outpaced construction activities in some countries. Annual UK efficiency investment grew by 2.3% since 2016, while construction investment saw no growth. Similar patterns were evident in Italy and Switzerland. The European Commission has stated that annual EU buildings efficiency investment must rise to EUR 177 billion to 2030 (EC, 2020). One measure to achieve this, the Energy Performance of Buildings Directive, revised in 2018, seeks to increase the yearly renovation rate to 3%. Norway, with USD 32 million, spent 25% more on residential buildings efficiency and announced a planned increase in its ENOVA funding.

In Canada, the 2019 budget raised federal public spending on buildings efficiency by 20% to CAD 600 million. In the United States, however, overall investment in buildings energy efficiency was stable but the number of states with mandatory building performance standards rose, which should raise future investment.

In China, investment in buildings efficiency climbed by an impressive 10% to USD 30 billion, but was outpaced by overall construction investment growth of 13%. As private investment in energy efficiency is around four times the level of public spend, tighter energy performance standards could spur even more improvement in private buildings.

Across India, energy efficiency investment is expected to rise as more stringent buildings codes are published by states, though the outcome will be strongly influenced by their implementation. However, India was less than 5% of the global total in 2019.

Buildings energy efficiency investments in selected regions and countries, 2014-2019

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Spending on renewable heat sources for buildings in selected regions and countries, 2015-2019

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Heat for buildings, including for space and water heating, accounts for nearly one-quarter of global final energy consumption. The use in buildings of fossil fuels – mostly natural gas and oil – to supply heat contributes around 8% of global CO2 emissions. More than 65 jurisdictions have established or are considering targets for net-zero emissions by 2050, pushing heat up the policy agenda for many governments, especially in the northern hemisphere (IEA, 2019b). Countries and municipalities have set out different strategies for deep decarbonisation of heat, using five possible possible approaches:

  • lower heating demand: invest in more efficient building envelopes;
  • direct electrification: replace fossil-fuel heating equipment with heat pumps, which operate with very high efficiency, supplied by a fully low-carbon grid and/or by self-consumption of renewable power;
  • gas decarbonisation: replace gas-fired heating equipment with boilers adapted to hydrogen and boost low-carbon gas delivery
  • direct use of renewables: biomass, geothermal, solar thermal;
  • district heat expansion: replace individual heating equipment with connections to an expanded heat network delivering heat from renewables, heat pumps and waste heat.

While some of these measures reinforce one another, others will be most effective if all buildings locally adopt the same solution. Deep energy efficiency improvements are compatible with all other options. However, widespread deployment of district heat or direct electrification may not be compatible with upgrading the gas grid, and end-use equipment, to deliver and consume hydrogen and other low-carbon gases, unless paired with hybrid heat pumps.

If countries were on a path towards full decarbonisation of heat by mid-century, we would expect to see growth in each area, with regional differences reflecting different strategies, and a slowdown in expansions of natural gas grids. In 2019, USD 151 billion was spent on buildings energy efficiency, compared with around USD 24 billion on end-use renewables, mainly solar thermal water heaters and biomass boilers.

Global heat pump sales continued to grow in 2019, at around 5%, to roughly 20 million. China remains the largest market as it seeks to modernise its heat supply. Air-to-air heat pumps in new buildings and major refurbishments are the dominant applications. The European heat pump market has experienced double-digit growth in recent years, mostly in countries with high shares of electric heat like France, but also where policy favours them compared to gas and oil boilers. The IEA SDS includes a doubling of heat pump sales by 2025 (IEA, 2020c).

Since January 2019, at least six electrolyser projects that aim to blend some of their produced hydrogen into the gas grid for heating have started operation (see R&D and Technology Innovation). One of these, the UK HyDeploy project (0.5 MWe, USD 8.5 million) is injecting hydrogen into the grid today. At around half a billion dollars per year, investments in biogas and its upgrading to biomethane for the gas grid are ahead of those in hydrogen, supported by US utility commitments, lower production costs and rising demand for low-carbon gas (IEA, 2020d). District heat investments are the largest at USD 10 billion to USD 15 billion per year in Europe, but not all are in low-carbon sources. However, network upgrades can ease integration of low-carbon heat, raise system efficiency and offer valuable flexibility to the power grid (see below).

Estimated investment in district heating pipelines in Europe, 2000-2019

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Total operating district heat pipelines in Europe, 2005-2019

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Total installed district heat generation capacity in Denmark, 2000-2018

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District heat sales in Europe by fuel source, 2000-2019

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In some countries, investment in district heat – an insulated network that delivers hot water or steam from co‑generation (the combined production of heat and power) or heat-only sources via pipelines to space heating or hot water users in buildings – has risen and encouraged more use of low-carbon energy. Per unit of energy, district heat is often a lower-cost way of integrating low-carbon energy for heating than individual systems. This includes heat from renewables, such as biomass, heat pumps or harnessing heat from industrial processes that would otherwise have been wasted. Including large-scale heat pumps and thermal storage, enabled by digital technology, can also facilitate electrification of heat and provide flexibility to power systems while reducing the capacity they would need to meet peak heat demand (see Power section).

The state of district heating varies widely among markets, even those with high heat demand. Some geographies, such as northern China, Poland and Russia, are upgrading legacy systems that supply up to half of national residential heat and are integrated with power plants, often using coal. Other countries, including Denmark, France, Germany and Sweden, are expanding district heat systems in urban areas based on lower-carbon options such as geothermal, biomass or waste. A third group of countries, including the Netherlands and the United Kingdom, is aiming to create a new momentum for efficient heat networks in towns traditionally dependent on individual natural gas heating and less familiar with collective options. The Dutch Climate Act 2019 foresees an increase of district heat by up to 100% by 2030. A UK Green Heat Network Fund of GBP 270 million was announced in 2019 for 2022‑25.

In some countries, a focus on electrification of individual heating, interest in hydrogen or electricity market conditions have reduced interest in district heat. In China, where extensive networks are largely supplied by steam from coal-fired power plants, heat policy currently favours heat pumps, including for the replacement of older electric water heaters for district heat. However, three new solar thermal district heat systems were commissioned in Tibet in 2019. In the United States, urban plans for reducing emissions from residential heating often focus on individual solutions. However, upgrades of existing heat networks on university campuses has raised interest, with several long-term contracts signed for network modernisation and integration of lower-carbon energy. Even in countries with well-established district heat networks, including some in Central and Eastern Europe, district heat is not always a favoured means of reducing emissions due to the costs of upgrading legacy systems and the economic integration with fossil fuel power.

District heating is a major source of buildings heat in Europe, and networks are expanding, even if it is not promoted in all countries. Around 60 million people there are served by district heat, which represents 12% of all buildings heat supply in the European Union and over 60% in Denmark and Latvia. In energy terms, this 450 TWh of district heat was equivalent to 15% of EU electricity supply.

The total installed length of district heat pipelines expanded by one-third from 2005 to 200 000 km in 2019. Annual investments in pipelines in Europe, including refurbishment, are estimated at around USD 6 billion. Four countries – Denmark, France, the Netherlands and Sweden – account for two-thirds of this. Though data are scarce, investment in heat supply plants and thermal storage is estimated to be higher than for pipelines, raising total annual investment above that of the European natural gas boiler market (USD 11 billion) (GMI, 2019).

In Europe, over 10 GW of district heat generation capacity has been added since 2010, reaching 340 GWth. In response to policy incentives to increase the use of renewable energy, biomass and municipal waste have been the focus of much of the investment in new supply since 2000. The share of biomass in district heat supplies in Europe has risen from 10% over 25% in the last 20 years, mostly displacing coal. Heat from coal and oil combined fell from a share of around 50% to 27% over the same period, while natural gas remained near one-third. The displacement of coal and oil has largely been on a like-for-like basis, with biomass also providing high-temperature heat, often from co‑generation.

More recently, investment activity has turned to other low-carbon heat-only sources. These include geothermal, solar, industrial waste heat and heat pumps. Three emerging trends are supporting developer appetite for these other low-carbon sources of district heat: deployment of so-called third- and fourth-generation district heat; rising power system flexibility needs; and depressed wholesale power prices.

Third- and fourth-generation district heat systems have been developed to operate with lower-temperature water (55-80°C), which has lower distribution losses, can be used directly in homes, and accommodates waste and renewable heat more easily. Since 2010, the share of non‑biomass renewables in European district heat rose from 5% to 9%. In 2019, a 3.4 MW geothermal plant was connected in Holzkirchen, Germany, and new projects took final investment decisions in France. Latvia added 15 MW of solar thermal heat. As these modern systems have low losses and can manage multiple smaller heat sources, they can “store” energy when renewable power exceeds grid electricity demand.

Heat pumps supply just 1% of district heat in Europe, but additions are being made. An investment decision for a 13 MW heat pump was taken in 2019 in Helsinki, where fossil fuel co‑generation is being phased out by 2029. Shifting electricity market patterns are impacting co‑generation plant profitability in countries in the Nordic region due to low power prices. Investment in gas and coal co-generation plants in Europe has fallen around two-thirds, from over USD 6 billion in 2010. These trends have tended to favour heat-only supplies, but have not significantly changed the average share of co‑generation in Europe’s district heat supply, which has declined by just 5 percentage points, to 65%.

Denmark is an example of how investment in modern heat networks can transform a legacy system. Heat supply capacity rose from 16 GWth to 25 GWth since 2000, including the addition of 4.5 GWth from low-carbon sources. The use of lower-temperature pipelines has enabled cities such as Aalborg to add waste heat from a crematorium and a 1.2 MW heat pump in 2020. The share of co‑generation in district heat supply capacity fell from 47% to 40% between 2000 and 2018 in Denmark.

Financing transactions for district heat increased in 2019 and early 2020, with several networks and businesses changing hands, e.g. Fortum announced the sale of four regional district heating businesses, and district heating companies changed hands in Latvia and Finland. Lyon’s district heating network was refinanced and the refurbishments of two networks in Poland secured project finance. These indicate that capital is available for these assets that often have multi‑decade monopoly contracts. However, municipal networks in some European countries struggle to finance upgrades; the European Investment Bank is providing EUR 46 million to operators in Poland.

Share of SUVs in total car sales in key markets, 2010-2019

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When oil demand for passenger cars will peak is hotly debated. It depends on the interplay of several factors that are currently in flux: the steadily improving fuel economy of new cars; the speed of turnover and expansion of the fleet; electrification; and consumer preferences for ever-larger cars. In 2019, the fuel economy of new internal combustion engine cars continued to improve, market expansion slowed globally and electrification continued, but decelerated. However, other factors pulled in the opposite direction: lower fleet turnover in mature markets meant that fewer inefficient cars were replaced with new cars, and the market maintained its relentless shift towards large vehicles with relatively lower fuel economy.

To quantify some of these factors, electric car sales rose by 0.1 million in 2019 while the passenger car market as a whole contracted by around 4 million sales worldwide, or 5%. Globally, the electric cars sold in 2019 are expected to reduce transport oil demand by around 50 kb/d. On top of this, the 155 000 electric buses and other commercial vehicles registered in 2019 could offset a further 10 kb/d. It is hard to quantify the impact of fewer total car sales on oil demand, because we do not yet know the balance between delayed replacements of vehicles and slower growth in overall demand for car travel. However, a rough estimate suggests that fewer sales could have meant foregoing a 15 kb/d reduction in oil demand that would have arisen through fuel economy, as more old cars were replaced with new around the world. The replacements of older cars in 2019 likely avoided up to 150 kb/d of oil demand but this does not compensate for the annual increases of over 500 kb/d of road transport fuel demand on average since 2014, an increase that has been mostly due to putting more cars on the road.

These amounts of avoided oil demand growth would have been larger, however, had there not been a dramatic shift towards bigger and heavier cars. This shift has led to a doubling of the share of SUVs in car sales over the last decade. As a result, there are now well over 200 million SUVs on the road globally, up from about 35 million in 2010. SUVs account for 60% of the increase in the global car fleet since 2010. In 2019, their share in total car sales topped 40% for the first time, compared with less than 20% a decade ago.

This trend has been universal and unrelenting. Today, half of all cars sold in the United States and over 35% of the cars sold in Europe are SUVs. Oil prices and tax policies have not put off consumers in these regions from buying cars with higher operational costs. In China, as elsewhere, SUVs are often considered symbols of wealth and status. In India, sales are currently lower, but consumer preferences are changing as more and more people can afford SUVs, and their share is rising. Similarly, in Africa, the rapid pace of urbanisation and economic development is strengthening demand for premium and luxury cars.

On average, SUVs consume about a quarter more fuel per kilometre than medium-sized cars. The higher share of SUVs was responsible for around 500 kb/d growth in oil demand from passenger cars between 2010 and 2019. While this was more than offset by fuel economy improvements in other car segments, total savings would have been larger without the higher SUV sales. In some countries, SUVs are not included in the same fuel economy standards as smaller cars, and unless policy makers take into account the shift to SUVs, then this counterbalance cannot be assumed in the future.

Total light-duty vehicle sales, 2010-2019

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Global electric passenger light-duty vehicle sales and market share, 2010-2020

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The year 2019 was turbulent for the auto industry, but this is likely to appear mild in comparison with 2020. Electric cars (including passenger battery EVs, plug-in hybrids and fuel cell EVs), for which sales grew nearly 70% per year between 2011 and 2018, are strongly affected by these trends, as well as changes to policy support in key markets.

By the end of 2019, electric car sales growth had slowed to its lowest rate since 2011, with total registrations of 2.1 million, just 6% higher than 2018. However, electric car sales outperformed the car market as a whole, as total car sales growth slowed in all major regions and turned negative in China and the United States in 2019. In China this reflected a sluggish economy, low consumer confidence and high household debt. The US market is shaped by replacements of existing cars, and the sales boom in the prior five years meant that fewer consumers needed to upgrade their cars despite the relatively strong economy. In Europe, sales growth would have been flat but for a spike in December after EU fuel economy rules were clarified.

Changes to purchase incentives also had major impacts. The maximum subsidy under China’s New Energy Vehicle scheme was halved in July 2019, to USD 3 700, with an immediate effect: EV sales in July and August were 10% lower than in those months in 2018. At 1.1 million, China’s full-year sales were 2% lower than 2018, but still represented half of all sales worldwide. National-level purchase incentives were to be phased out in 2020, but ambitious EV quotas for automakers and other policies were expected to keep sales rising.

EV sales also declined in the United States, by 10% to 330 000. This was partly a rebalancing after the bump in 2018 sales that accompanied the launch of the Tesla Model 3. In addition, the US market was weighed down in 2019 by the reduction of tax incentives for Tesla and GM models and uncertainty around the future of fuel economy regulations.

Europe was the only major region where electric car sales maintained their 2018 growth rate, rising 48% to over half a million for the first time. This trend accelerated into April 2020 as EU fuel economy standards tightened and Germany raised its purchase incentives. Carmakers may focus EV sales on Europe in response to a weaker outlook for US fuel economy regulations, pushing EU sales closer to the level in China.

Despite weaknesses in the global car market, more robust growth of electric car sales had been expected around the world in 2020. However, Covid-19 related lockdowns severely depressed auto sales in Q1 and Q2 and the industry has been particularly affected by the lost revenue. At the time of writing, a drop in global car sales of around 15% in one year is forecasted, which is dramatic in comparison with the 10% drop over two years that followed the 2008 financial crisis. Whether electric car sales follow the scale of this drop depends largely on government policy. In the first quarter of 2020, sales of electric cars were 9% lower year-on-year, compared with around 25% for the market as a whole. Some analysts, citing concerns about mining disruptions for battery inputs and the possibility that carmakers will delay scale-up of electric cars, suggest a significant fall in EV sales in the absence of new policy support (WoodMac, 2020). However, in April Chinese authorities delayed further subsidy cuts to 2022 and some local incentives were increased. Continued policy support, especially in Europe, underpins the IEA view that 2020 will see a year-on-year rise in EV sales, including a new record for the share of EVs in total car sales (IEA, 2020f).

Average price and driving range of BEVs, 2010-2019

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Spending on EV purchases, 2010-2019

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Encouraged by continued government support, global spending on electric car purchases grew to USD 90 billion in 2019, a 13% increase compared with 2018. Of this, USD 60 billion was on battery-electric cars and the remainder on plug-in hybrids. The rise in spending was lower than in 2018, when around USD 35 billion was added to the global electric car market in just one year, but higher than the growth in numbers of cars sold.

Spending rose faster than sales because of an increased share of global sales from the European market at the expense of China, where sales contracted under a slowing economy and reduced policy support. On average, prices for electric cars are higher in Europe than China, with BEVs 50% more expensive on average globally.

Electric car prices have been relatively stable since 2016, as savings from improvements in cost per unit of battery capacity have been passed on to consumers as additional range, not cheaper cars. The average range of a BEV sold in 2019 surpassed 330 km. Longer ranges are incentivised by policy in some countries. In China, purchase incentives for BEVs with driving ranges below 150 km were phased out in 2018, and ranges below 250 km became ineligible in 2019. Looking at the average car price as a function of its range shows that by this metric, the EV value proposition for consumers improved by 12% compared with 2018 and 36% compared with 2015.

Another reason that average prices have been stable is the higher share of large vehicle sales, including luxury sedans and SUVs. A partly offsetting factor stems from the lower share of plug-in hybrid sales, which are generally pricier on a like-for-like basis due to the need for two drivetrains. Their share fell from 50% in 2012 to 27% in 2019, reflecting the higher ranges and availability of BEVs. Electric car markets are increasingly tilted towards bigger cars. While electric versions of SUVs can be more attractive – due to higher fuel savings and manageable upfront price for buyers of larger cars – the overall costs of electrifying a fleet of bigger cars would be higher for governments and consumers alike.

As a share of total spending, the contribution of government support declined to 12% after rising slowly for several years. In other words, roughly USD 7 of consumer spending are generated for every dollar spent by governments. By correlating vehicle prices, sales data and support schemes to estimate the value of government purchase incentives (including tax breaks), we estimate that public spending amounted to USD 11 billion. This is USD 2 billion lower than in 2018 despite sales being 7% higher. Reasons include the lower level of subsidy in China and the expiry of US tax credits for Tesla and GM.

The ability of governments to reduce their share of total spending will be a key test of the sustainability of the electric car market in coming years. Unless government incentives adjust as the market increases, considerable pressure will be placed on public budgets. Between 2012 and 2017, the government share of total EV spending generally rose but there are signs it is declining as policies such as standards, regulations and mandates shift costs from the public sector to consumers and manufacturers. This trend will likely accelerate as electric cars become more competitive. However, in the immediate future the proposed inclusion of support for EVs in post‑crisis stimulus packages, as well as low oil prices, may put this development on hold.

Trends in prices for white certificates for energy efficiency in four markets around the world, January 2014 to March 2020

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After recent volatility in white certificate markets, price trends in 2019 and early 2020 have been relatively stable, with some sharp growth in Victoria, Australia. In France, certificate prices climbed to over EUR 8/kWh, or 30%, during 2019.1 Increasing price stability following policy changes in previous years indicates a maturing of market design from which other jurisdictions could learn. There are over 50 different energy obligation systems that generate certificates around the world, most of which do not have a marketplace for trade.

For more than 15 years, white certificates have allowed energy savings from efficiency projects to be traded by obligated parties, generally final energy suppliers, such as electricity and gas retailers. Tradable markets for energy efficiency reward energy suppliers for undertaking the most cost-effective projects. They provide a financial incentive that helps to decouple their revenues from demand for their core energy products and can also support efficiency investment by third-party providers, including energy service companies (ESCOs). However, market design is more challenging than in other areas of energy.

Regulators generally have limited advance knowledge about the costs of energy efficiency projects and the volumes of projects available at different cost levels. Furthermore, certification systems require sensitive assumptions about demand counterfactuals and additionality. Regulators face a challenge of balancing the robustness of the framework (to avoid fraud, gaming or double counting) against the level of administrative burden that may affect political support. In some cases, incentives have driven activity among consumers that were not the anticipated beneficiaries, which were low-income households in France or industrial consumers in Italy. Policy makers have made corrective market interventions to maintain incentives to invest and limit costs to consumers, which has sometimes resulted in price volatility.

The French market is in the middle of the 2017‑21 trading period, in which targets have increased.2 The rising price trend reflects projects higher on the cost curve, e.g. as bulk light bulb replacement opportunities are exhausted. Still, the outlook is clouded by ongoing discussions about the upcoming period and post‑2023, when new targets are set. In Italy, a price cap was introduced in 2018 in response to the peak that followed a tightening of eligibility criteria. Prices did not fall below the cap of EUR 250/toe in 2019. In the two Australian markets of Victoria and New South Wales, prices rose smoothly following adjustment in 2018 to a revaluation of lighting projects. In Victoria, they have rallied in recent months as newly proposed regulations anticipate the phase-out of these low-cost efficiency projects.

In 2020, prices are likely to be positively impacted by Covid-19 related restrictions as fewer certificates are generated, as well as ongoing policy processes. Obligations like this may also provide a means for governments to co‑ordinate the delivery of energy efficiency stimulus goals in co‑operation with large energy companies.

References
  1. French certificates represent a saving over the lifetime of the intervention, beyond a counterfactual of 4% demand reduction.

  2. The share of certificates to come from fuel poverty homes was raised for this fourth period, the end of which was extended by one year to the end of 2021.