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Gaining an Edge Energy demand and competitiveness
…where efficiency improvements often require substantial upfront investment. For less energy-intensive sectors (such as electronics, machinery, automobiles, textiles, and food and drink processing), energy generally plays a smaller role in overall costs. However, these lighter industries have significant potential to achieve cost-effective energy savings in the short term, with lower capital costs and greater potential for electrification. Managing costs in lighter industries is also crucial, not only to improve firm competitiveness but also to achieve broader economic objectives. While these sectors contribute around a quarter of industrial energy demand, they account for over half of industrial value added…
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Energy and AI AI for energy optimisation and innovation
…AI in power plant operations and maintenance yields potential cost savings of up to USD 110 billion annually by 2035 from avoided fuels and lower costs. AI also enables greater integration of renewable electricity into the grid. Our analysis finds that up to 175 GW of additional transmission capacity could be unlocked in existing lines with the use of AI. The applications of AI in end-use sectors are varied but have significant potential. In industry, AI is being used in various ways to optimise production processes. In the Widespread Adoption Case, energy savings of 8% could be achieved by 2035 in…
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Gaining an Edge Unlocking the potential of energy efficiency
…disparities highlight the potential for many firms to reduce energy expenditures through improved energy efficiency. In IEA countries, if all firms matched the energy consumption of the best performers in their subsectors, energy costs could be reduced by up to an estimated USD 600 billion The potential for energy savings varies by sector, subsector and facility. From process optimisation to capital upgrades, industrial facilities can achieve significant energy savings across a range of investments. Firms that implement a culture of energy management (an approach explored in section 2.2) can uncover average savings of between 5% and 11% for heavy…
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Gaining an Edge Summary for policymakers
Energy efficiency delivers more than energy savings and emission reductions – it can also improve the competitiveness of countries and firms. From increased profitability to job creation, energy efficiency helps firms compete amid high costs, growing demand, and rising trade pressures. In today’s global context, energy efficiency is not only a matter of energy policy, but also of economic policy.Today the world’s industries can produce nearly 20% more value for a given amount of energy than they could two decades ago. This progress has yielded significant benefits at the country level. G20 countries have doubled their economic output…
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Multiple Benefits of Energy Efficiency for Business Operational benefits
…seen in industrial processes. In food processing, for example, a high-efficiency centrifugal compressor has been shown to reduce energy consumption by more than 40% while cutting maintenance costs by 85%. Similarly, the use of variable speed drive (VSD) motors in heating, ventilation and air conditioning (HVAC) systems under high-temperature conditions in a plant in Saudi Arabia reduced energy consumption by 30% and maintenance costs by 20%.Cross-sector analysis shows these patterns are consistent across a wide range of technologies, from heat pumps and industrial motors to electric vehicles. Resource efficiency can amplify energy savings, almost doubling sav...
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Energy Management for Industry Executive summary
…energy use industry is one of the main reasons for this slowdown. This is a result from two factors happening in parallel: first, the stagnation of industrial efficiency, and second, the growth of industrial energy demand. This is the worst possible scenario for efficiency progress. However, there is a clear advantage to investing more resources in industrial energy efficiency. While industry is acknowledged as one of the most difficult sectors to decarbonise, it yields the best results from funding. Energy management can deliver substantial and persistent savings Energy management - the proactive and systematic monitoring, analysis, control, and optimisation of energy…
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Multiple Benefits of Energy Efficiency for Business Turning the opportunity into reality
Across sectors, the evidence consistently shows that the value of energy efficiency extends far beyond energy savings, often matching or even exceeding them.A key challenge is that much of this value is not systematically captured in investment decisions. Business cases are often built on energy savings alone, overlooking gains in productivity, resource efficiency, product quality, brand reputation and workforce health. Reflecting these wider benefits can significantly strengthen investment cases and improve how efficiency projects compete for capital.This report draws on available evidence to highlight these broader benefits and why they matter in practice. The steps below show how…
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Energy Efficiency 2024 Does a heat pump work in a house with poor insulation?
…poorly insulated homes, heat pumps provide energy savings compared to gas boilers, as the efficiency gains are so significant. Shifting from a 92% highly efficient gas boiler (minimum performance according to the current UK regulation) to a high efficiency air- or ground-source heat pump, using the United Kingdom as an example, results in 60-70% of energy savings for a solid walled house (with no insulation). Adding high levels of insulation along with the heat pump can lead to an impressive 90% reduction in annual energy demand for heating. Heat pumps can also lower energy bills, but this depends…
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Gaining an Edge Policy implications
…savings or reduction of greenhouse gas emissions. An IEA survey of 1 000 industrial firms, conducted in 2025, indicates that more than half of the companies have experienced a broad range of benefits from energy efficiency and 88% can quantify or estimate the monetary value of these benefits. While energy efficiency policies and programmes targeting industry have been shown to be cost-effective, collection and analysis of more granular data in co‑operation with the industry sector can improve the design, adaptation and targeting of policy packages.In terms of competitiveness, there is a strong case for increased focus on energy…
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Sheltering From Oil Shocks Oil use in industry
…and sector-specific benchmarks to help facilities make quick savings. A walk-through of a facility with operational staff, combined with the use of energy management information systems, is often the first step to identify these opportunities.Policy examples: There is experience dating back to the 1970s on how to encourage urgent energy savings in industry. Japan promoted quick energy management, such as cleaning, measuring, and minor repairs, while the United Kingdom recommended operational improvements, maintenance and monitoring. Meanwhile, the United States created Industrial Assessment Centers to help manufacturers cut back on energy costs through free energy audits. More recently…
