Global harmonization of energy efficiency standards based on best practice would provide a solid foundation for other climate change mitigation measures, potentially reducing the need for the most radical and expensive options. Even a gradual and uncoordinated dispersion of best practice will act as a dampener on electricity demand growth, unless electric cars are widely adopted. Neil Ford
According to the World Energy Council, energy consumption is now growing more slowly than economic output in every region of the world, except the Middle East. However, energy intensity – the ratio of energy use to economic output – is not falling quickly enough, although the decline does appear to be accelerating. World primary energy intensity fell from 0.19 kg of oil equivalent per 2005 dollar in 2005 to 0.17 koe/$ in 2010, and then to 0.15 koe/$ by 2014.
This is equivalent to an average 1.5% reduction in energy intensity a year between 2000-2014. However, the International Energy Agency says that even with a major, global switch to renewables, a reduction in energy intensity of 2.4% a year is required to keep the long-term rise in global temperatures to less than 2°C above preindustrial levels.
The cumulative benefits of a more rapid fall in energy intensity are potentially huge. Far from the forecast 37% increase in global energy consumption between 2010-2040, the IEA calculates that improved energy efficiency would cut energy consumption by a third between 2010 and 2050. McKinsey Global Institute ranks energy efficiency as the top priority among measures to mitigate climate change. The World Bank and other international organizations are promoting energy efficiency as “the first fuel” of energy policy.
Barriers
While governments’ commitment to emission reductions has been reinforced by December’s Paris Agreement on climate change, the collapse in oil, gas and coal prices since 2014 has significantly reduced the immediate returns from energy efficiency investment. Moreover, energy efficiency is not necessarily in the best interests of power companies and hydrocarbon producers, as it reduces sales of their primary products by volume.
An electricity utility is interested in improving the efficiency of its generating equipment because this produces more energy for the same fuel cost, but it is harder to persuade them to invest in reduced customer consumption. As a result, encouraging energy efficiency generally falls to governments, international organizations and companies that design and manufacture components.
Moreover, promoting energy efficiency is as much about changing behavior as it is to do with making more efficient products. The average US home consumes more than double the energy of a UK home. This is partly because they tend to be bigger and make more use of air conditioning, but also because energy efficiency standards are lower.
Dishwashers, washing machines and freezers in the UK and the rest of the EU used 32-66% less energy on average in 2012 than they did in 1990, mainly because EU standards have been tightened much more than those in the US over that period.
However, there are also cultural differences, with far more US citizens leaving lights and televisions on even when they are not being used, while more European devices go into sleep mode when they are not being used than in the US.
Setsuden strategy
One the most extreme examples of the impact of behavioral change on energy consumption is that of Japan following the Tohoku earthquake in March 2011. Japan lost a quarter of its generating capacity when the Fukushima nuclear plant was damaged and all other reactors taken off stream as a result of the earthquake. While oil, coal and gas-fired electricity generation all increased to compensate, 40% of the shortfall was made up by energy efficiency and conservation measures introduced between 2011 and 2013, showing just how much impact they could have in a short space of time.
The Setsuden strategy, which translates as ‘saving electricity’, started with energy conservation, including switching off exterior lighting, removing some indoor bulbs and encouraging firms to use much less air conditioning.
The second element was allied to energy conservation by making individuals and companies much more aware of their energy use.
The sense of national emergency and the need to avoid rolling power cuts triggered behavioral changes that have proved surprisingly durable with the population. Japanese companies – notoriously reluctant to change established procedures and methods – quickly swung their weight behind the Setsuden plan.
The government has now included energy efficiency in its energy security strategy, alongside nuclear power and renewables. It has also promised to give energy efficiency a far bigger role in its plans to cut national greenhouse gas emissions.
Need for global coordination
The European Commission’s Savings and benefits of global regulations for energy efficient products report, published last September, argued that if the most stringent current Minimum Energy Performance requirements for product energy efficiency had been adopted and harmonized globally by late 2015, global final energy consumption would be 9% lower, and energy consumption due specifically to products would be 21% lower, a total saving of 8,950 TWh.
It stated: “In order to achieve these benefits, there are a number of barriers to be overcome – however, the core requirement for harmonization is simply the coherence and comparability of test standards and policy approaches, which is achievable through coordinated efforts in the short to medium term at relatively low cost.”
The EU estimates that the world would save up to 7,600 TWh, or 13% of anticipated global demand by 2030, if every country adopted its new rules on energy efficiency, including in building design. This would represent a total saving of €280-€410 billion ($303-$444 billion).
However, international cooperation and harmonization have only thus far been achieved in one or two areas, including electric motors and distribution transformers.
There appears to be little likelihood of an all-embracing global strategy to implement energy efficiency and conservation measures, as there was on restricting the use of chlorofluorocarbons in order to tackle the thinning of the ozone layer.
Nonetheless, most governments in the industrialized world are now taking energy efficiency more seriously and this trend is likely to intensify and spread as it becomes apparent that it can help achieve targets on carbon emissions.
Where demographic and economic growth can unexpectedly boost emissions, governments can impose stricter energy efficiency standards as a counterbalance, using them as safety valve within their global warming strategies.
The EU has taken a lead with the introduction of mandatory energy efficiency standards. Its Minimum Energy Efficiency Requirements effectively limit the maximum amount of energy that may be consumed by a product, or the minimum level of efficiency, in performing a specified task. This has resulted in a number of high profile press cases, including the ‘ban’ on powerful hairdryers.
The EU has set a goal of cutting energy consumption by 20% through energy efficiency measures between 2000 and 2020, increasing to 27% by 2030.
It claims this will create 1.7-2.5 million jobs in the manufacturing sector, although there is obviously huge scope for these jobs to be created outside the EU. A much smaller number of jobs would also be lost in the power sector because of lower demand.
More broadly, by 2013, energy efficiency standards were applied to at least one product in more than 70 countries; comparative energy labels were used in 88 countries; and 73 countries – accounting for more than 90% of global GDP and 70% of global population – had adopted regulations setting some form of minimum energy efficiency requirement for one or more products.
The EU’s system of labels using color coding to explain the energy efficiency of products has been copied in many countries, and the EU Ecodesign Directive on buildings standards has also had some global influence.
There have also been some global agreements, including the IEA 4e program (Energy Efficiency End-use Equipment), which addresses energy efficiency cooperation in electrical equipment. In addition, the UN Environment Programme has set up an agency dedicated to supporting energy efficient lighting under its ‘en.lighten’ initiative.
There are also many bilateral agreements whereby the donor agencies of industrialized countries provide funding to support equipment energy efficiency policy in developing countries.
Harmonization of energy efficiency standards globally based on best practice would appear to offer a relatively cheap means of emissions reductions. Even partial progress towards this goal implies long-term downward pressure on per capita energy consumption, and particularly electricity demand, unless there is a pronounced shift towards electrification in ground transport.
By : Platts