Madhumitha Jaganmohan
Research expert covering climate and environmental sustainability
Global energy efficiency - statistics & facts
Energy efficiency means providing the same or better service using less energy. Many countries currently have very low energy efficiency within their grids and high energy consumption in their economies. Globally, oil and coal are the largest primary energy sources, each accounting for about 30 percent of primary energy consumption. Improving energy efficiency is a cost-effective and efficient way to meet energy demand while reducing consumption and environmental impact, leading towards increased sustainability. In most cases, energy efficiency can be increased with the implementation of smart-grids to better match supply and demand with a range of sensors like smart-meters and digital energy management systems.
China also strengthened its industrial energy efficiency policies in 2022 with new plans to improve the sector's energy intensity by 13.5 percent by 2025 compared to 2020 levels. As of 2022, China had the world’s highest number of people holding end-use energy efficiency jobs. In March 2023, the European Union also adopted more stringent measures to improve energy efficiency. The updated EU directive for 2023 has raised the energy efficiency target, with the goal to ensure that the total EU energy consumption does not exceed 992.5 million tons tons of oil equivalent (Mtoe) for primary energy and 763 Mtoe for final energy by 2030.
Energy efficiency is crucial in the broader transition to clean energy within the energy system. For example, smart and efficient electricity use can hasten the decarbonization of the power sector and improve the integration of renewable energy sources. Shifting from heavy industries to less energy-intensive service sectors can enhance the system's overall efficiency. Moreover, energy efficiency results in lower energy bills for consumers and decreases the energy import expenses for countries.
Escalating energy costs, supply interruptions, and the risk of shortages have sharpened the emphasis on enhancing efficiency. This energy sector disruption has spurred consumers and governments to intensify their energy conservation measures and improve energy management practices.
Call to action for promoting global energy efficiency
In response to the ongoing energy crisis, nations accounting for higher shares of global energy consumption have introduced or strengthened their energy efficiency policies. For example, in 2022, the U.S. announced significant new funding under the Inflation Reduction Act (IRA) to enhance energy efficiency initiatives and significantly reduce energy costs. The Inflation Reduction Act in the U.S. is projected to allocate approximately 161 billion U.S. dollars towards clean electricity tax credits from 2022 to 2031.China also strengthened its industrial energy efficiency policies in 2022 with new plans to improve the sector's energy intensity by 13.5 percent by 2025 compared to 2020 levels. As of 2022, China had the world’s highest number of people holding end-use energy efficiency jobs. In March 2023, the European Union also adopted more stringent measures to improve energy efficiency. The updated EU directive for 2023 has raised the energy efficiency target, with the goal to ensure that the total EU energy consumption does not exceed 992.5 million tons tons of oil equivalent (Mtoe) for primary energy and 763 Mtoe for final energy by 2030.
Energy transition and energy efficiency
In 2023, the annual global investment in energy transition technologies rose to 1.77 trillion U.S. dollars, setting a record and representing a 17 percent increase from the previous year. This significant shift towards clean energy is anticipated to greatly boost the demand for critical minerals, positioning the energy sector as a key influencer in mineral markets. This demand will be driven by shift in transmission technology and increase offshore energy or wind energy production. This positive trend in global investment in energy efficiency, which amounted to 380 billion U.S. dollars in 2023 and is expected to grow by nearly ten percent by 2030, is a beacon of hope for a more sustainable future.Energy efficiency is crucial in the broader transition to clean energy within the energy system. For example, smart and efficient electricity use can hasten the decarbonization of the power sector and improve the integration of renewable energy sources. Shifting from heavy industries to less energy-intensive service sectors can enhance the system's overall efficiency. Moreover, energy efficiency results in lower energy bills for consumers and decreases the energy import expenses for countries.
Escalating energy costs, supply interruptions, and the risk of shortages have sharpened the emphasis on enhancing efficiency. This energy sector disruption has spurred consumers and governments to intensify their energy conservation measures and improve energy management practices.
