Multiple Benefits

The multiple benefits of energy efficiency

The multiple benefits of energy efficiency capture and communicate the broader value energy efficiency measures can deliver. Revealing the potential of energy efficiency to support economic growth, enhance social development, advance environmental sustainability, ensure energy-system security and help build prosperity, repositions energy efficiency as an effective tool for economic and social development.

Energy access

Energy efficiency is vital to improving energy access globally, especially in emerging economies where there is increasing energy demand. Despite widespread progress, 674 million people remain without access to electricity, and energy efficiency on both the supply and demand sides has a role to play in increasing the available bandwidth in existing generation, transmission and distribution networks.

Energy efficiency enabling universal energy access

Universal access does not need to be costly. Figure 1 below shows that achieving universal access to electricity and clean cooking technology will cost a 1.9% increase in energy sector investment and a net increase of 37 Mtoe per year, while saving 1.8 million lives annually (IEA, 2017). This scenario assumes the use of energy efficiency as an integral part of energy access policies.

Figure 1 Additional impact of the Energy for All Cases relative to the New Policies Scenario in 2030


Source: IEA analysis, KTH-dESA.; International Institute for Applied Systems Analysis (IIASA)
Notes: GHG = greenhouse gas. GHG emissions are from biomass combustion in traditional cookstoves.

The benefits of achieving universal energy access by 2030 far outweigh the costs

The recent Energy Access Outlook report shows that for those at the lowest levels of energy use, the number of affordable options has greatly increased thanks to the falling cost of technology and gains in energy efficiency for end-use appliances. There is a role for the use of super-efficient appliances paired with off-grid energy generation systems in enabling supply to remote areas that are sparsely populated or far from the existing energy grid. For these areas, the cost of energy can be prohibitively high, due to the lack of existing electricity grid infrastructure and the large distances over which fuel sources must be transported.

Analysis shows that while developing countries are often the recipients of second-hand and inefficient appliances, reducing demand through the use of super-efficient appliances, especially those operating on direct current (DC), paired with off-grid systems (such as solar PV systems), can maximise the energy services delivered by each kilowatt of electricity.

There is also a role for the use of efficient cookstoves for the 2.8 billion people who do not have access to clean cooking facilities and rely on low-efficiency, traditional cookstoves. These cookstoves produce high particulate matter pollution due to the incomplete combustion of solid biomass, thereby reducing the life expectancy and adversely affecting the health of many people, in particular women around the world. Reducing the use of solid biomass through the transition to higher efficiency LPG or biogas cookstoves would significantly reduce the labour required for the collection and transport of solid biomass, a task predominantly undertaken by women, and also significantly reduce deforestation in areas where biomass demand is high.

Energy access and reliability

For the nearly 60% of health facilities in sub-Saharan Africa that have no access to electricity (SE4All Africa Hub, 2014), and the 28% of healthcare facilities and 34% of hospitals that have unreliable access electricity. Medical staff must often work with polluting kerosene lamps and refrigerated vaccines are under constant threat of deterioration (UNEP, 2017; WHO, 2010). Energy efficiency measures, such as replacing existing lamps with more efficient LEDs, and the use of efficient solar-powered DC refrigerators could ensure reduce pressure on the existing grid, improving reliability and reducing costs.

Health and well-being

Energy efficiency measures can support good physical and mental health primarily by creating healthy indoor living environments with healthy air temperatures, humidity levels, noise levels, and improved air quality.

The World Health Organization estimates that globally air pollution causes about 3 million premature deaths a year, making air pollution a significant environmental risk. Energy efficiency measures targeting indoor and outdoor air quality can have major impacts for global health.

Recent evidence shows that chronic thermal discomfort and fuel poverty also have negative mental health impacts (anxiety, stress, and depression). Energy efficiency improvements targeting fuel poverty can therefore improve mental well-being. Energy efficiency’s impact on mental health may be enhanced if combined with financial support mechanisms and strong community engagement (Grey et al. 2017).

Poverty alleviation, health and energy efficiency

A household is broadly defined as being in fuel poverty if more than 10% of its annual income is spent on energy. Most often, fuel poverty arises at the nexus of low income, poor housing quality and high energy costs. Fuel poverty is also strongly associated with sub-optimal physical and mental health. Energy efficiency retrofits of low-income housing offers a more enduring solution to these problems than energy subsidies because they address the cause of fuel poverty, rather than the symptoms.

Several IEA member countries, including Australia, Ireland, New Zealand, the United States and the United Kingdom have targeted energy efficiency policies to address fuel poverty with positive results. A study using data from New Zealand’s Warm Up NZ: Heat Smart programme evaluation indicated significantly higher monetised benefits among families on low to modest incomes of USD 519 per year after the retrofitting compared to USD 183 for higher-income families (Telfar-Barnard et al. 2011)

Governments use a range of policies to mitigate fuel poverty, including support payments for fuel costs, social tariffs (subsidies) on energy prices, grant programmes for expenses associated with energy efficiency upgrades, or free retrofit programmes for low-income households. To date, programmes for energy efficiency retrofitting of low-income housing have delivered the greatest benefits, with health improvements representing as much as 75% of the total return on the investment for these interventions (Grimes et al. 2011).

Fuel poverty is also strongly associated with sub-optimal mental health, in part because of the financial stress of coping with high energy bills and debt. Energy efficiency measures that improve the affordability of energy bills in low-income homes can have a measurable effect on improving mental well-being (e.g. happiness and coping) and preventing mental disorders (e.g. anxiety and borderline depression) (Liddell et al. 2011).

The impact of energy efficiency in buildings

While energy efficiency measures in diverse sectors show potential to deliver health and well-being improvements, measures targeting buildings are often easier to verify. Energy efficiency retrofits in buildings (e.g. insulation retrofits and weatherisation programmes) create conditions that support improved occupant health and well-being, particularly among vulnerable groups. The potential benefits of energy efficiency measures include improved physical health such as reduced symptoms of respiratory and cardiovascular conditions, rheumatism, arthritis and allergies, as well as fewer injuries. In cold climates, energy efficiency improvements can lower rates of excess winter mortality while in hot climates, they can help reduce the risk of dehydration and negative health impacts.

The health benefits of energy efficient buildings can be realised in both homes and workplaces. A Singaporean study found that people working in energy efficient buildings are less likely to suffer from fatigue, headaches or skin irritations. Improving the health of workers could in turn have significant implications for workplace productivity.

Temperature and air quality

Measures to improve insulation, heating and ventilation systems can have positive impacts on air quality, reducing respiratory and cardiovascular diseases, and allergies. They also drive significant and consistent mental health improvements (Lindell et al. 2010). 

Thermal quality refers to whether the indoor temperature is comfortable and healthy. While most evidence relates to the impact of cold environments, over-heating can also damage health through dehydration (Naughton et al. 2002). Energy efficiency retrofit programmes that include installing insulation are shown to enable occupants to raise indoor air temperatures to healthy levels. Temperature has a large impact on employee productivity and comfort in the work place. All of these measures, particularly ventilation, play a role in reducing indoor dampness and the associated build-up of mould that exacerbates many health conditions (Thomson et al. 2013).