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IEA: ‘We can avoid 95 exajoules a year of final energy consumption by end of decade’

SØNDERBORG, Denmark, 8 June 2022: Global energy and climate leaders are gathering in Denmark for a major ministerial meeting that could drive urgently needed improvements in energy efficiency, with new analysis by the International Energy Agency (IEA) showing that stronger efficiency measures can reduce energy bills, fuel imports and greenhouse gas emissions quickly and significantly.

The IEA’s 7th Annual Global Conference on Energy Efficiency in Sønderborg, Denmark, from June 7-9, is bringing together more than 20 Ministers from countries around the world, including Denmark, Germany, Hungary, Indonesia, Ireland, New Zealand, Nigeria, Panama, Senegal, Sweden and the United Kingdom – as well as African Union Commissioner for Infrastructure and Energy, Amani Abou-Zeid and European Commissioner for Energy, Kadri Simson. Ukrainian Energy Minister, Herman Halushchenko will address the Conference live via video link. Decision-makers from industry, finance, international organisations and civil society will also participate in the discussions.

With the world contending with its biggest energy crisis since the 1970s, the focus of the Global Conference is on how to implement measures quickly to reduce energy use, with the aim of easing cost pressures on consumers, cutting reliance on fuel imports and driving progress towards climate goals – while supporting job creation and economic growth. The new IEA analysis, published to coincide with the Global Conference, underscores the vital role of energy efficiency and energy saving in meeting today’s crises by immediately addressing the crippling impacts of the spike in energy prices, strengthening energy security and tackling climate change.

Fatih Birol, Executive Director, IEA, said: “Energy efficiency is a critical solution to so many of the world’s most urgent challenges – it can simultaneously make our energy supplies more affordable, more secure and more sustainable. But inexplicably, government and business leaders are failing to sufficiently act on this. The oil shocks of the 1970s set in motion major advances in efficiency, and it is utterly essential that efficiency is at the heart of the response to today’s global energy crisis. The leaders meeting at the IEA Global Conference on Energy Efficiency need to make this the moment when the world hits the accelerator on efficiency – or we may fail to respond to the current energy crisis properly and pay the price for years to come.”

This year’s Global Conference is jointly organised by the IEA and Denmark’s Ministry of Climate, Energy and Utilities, with support from Danish engineering company, Danfoss.

Dan Jørgensen, Denmark’s Minister of Climate, Energy and Utilities. said: “It’s no longer a question of whether we should implement more energy-efficient solutions and technologies, globally – it’s a question of how we are going to do that. By increasing our energy efficiency, we can reduce our dependence of Russian oil and gas completely and move closer to achieving climate neutrality. The conference in Sønderborg and the gathering of energy and climate leaders from various sectors and all parts of the world is an important step in the right direction.”

Kim Fausing, CEO, Danfoss, said: “If the world is to meet climate goals to limit global warming, energy efficiency measures must be prioritized. A third of the reduction needed in CO2 emissions this decade, according to the IEA net-zero scenario, must come from improvements in energy efficiency. The good news is that the solutions are there to improve energy efficiency in all sectors. We don’t need to wait. We need action because the greenest energy is the energy we don’t use.”

On the main conference day, on June 8, leaders in industry, government and civil society are discussing issues, such as buildings of the future, the role of consumer behaviour and how to unlock financing for efficiency measures. The following day will include a unique closed-door session, where Ministers from around the world will share best practices on how to accelerate progress. The town of Sønderborg will also host a number of technological showcases for the leaders to visit.

According to the new IEA analysis, doubling the current global rate of energy intensity improvement to four per cent a year has the potential to avoid 95 exajoules a year of final energy consumption by the end of this decade, compared with a pathway based on today’s policy settings. This is equivalent to the current annual energy use of China. That level of savings would reduce global CO2 emissions by an additional 5 billion tonnes a year by 2030, about a third of the total emissions reduction efforts needed this decade to move the world onto a pathway to net-zero emissions by mid-century, as laid out in the Net Zero Roadmap the IEA published last year.

These extra efficiency efforts would cut global spending on energy. For example, households alone could save as much as USD 650 billion a year on energy bills by the end of the decade compared with what they would have spent in a pathway based on today’s policy settings. The amount of natural gas that the world would avoid using as a result of this would be equal to four times what the European Union imported from Russia last year, while the reduced oil consumption would be almost 30 million barrels of oil per day, about triple Russia’s average production in 2021. Compared to today, this global push on efficiency would help create 10 million additional jobs in fields including building retrofits, manufacturing and transport infrastructure.

The new IEA analysis shows the significant opportunities for rapid energy efficiency gains in all sectors of the global economy. Most of these opportunities involve readily available technologies and would fully pay for themselves through lower running costs, especially at today’s high energy prices. By 2030, around a third of the avoided energy demand comes from deploying more efficient equipment, ranging from air conditioners to cars. About a fifth comes from electrification, such as switching to heat pumps or electric cars. Digitalisation and use of more efficient materials in industry provide much of the rest.

The new analysis complements the insights on the critical role of energy efficiency and energy-saving measures in addressing today’s global energy crisis that were highlighted by the IEA’s recent 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas and 10-Point Plan to Cut Oil Use, as well as Playing my part: How to save money, reduce reliance on Russian energy, support Ukraine and help the planet, which was developed in cooperation with the European Commission.

IEA: COVID-19 slows progress toward universal energy access

PARIS, France, 2 June 2022: The COVID-19 pandemic has been a key factor in slowing progress towards universal energy access, the International Energy Agency (IEA) said through a Press release. Globally, 733 million people still have no access to electricity, and 2.4 billion people still cook using fuels detrimental to their health and the environment, the Agency said. At the current rate of progress, 670 million people will remain without electricity by 2030 – 10 million more than projected last year, it added.

The 2022 edition of Tracking SDG 7: The Energy Progress Report shows that the impacts of the pandemic, including lockdowns, disruptions to global supply chains, and diversion of fiscal resources to keep food and fuel prices affordable, have affected the pace of progress toward the Sustainable Development Goal (SDG 7) of ensuring access to affordable, reliable, sustainable and modern energy by 2030, IEA pointed out. Advances have been impeded particularly in the most vulnerable countries and those already lagging in energy access, it said. Nearly 90 million people in Asia and Africa, who had previously gained access to electricity, can no longer afford to pay for their basic energy needs, it added.

The impacts of the COVID-19 crisis on energy have been compounded in the last few months by the Russian invasion of Ukraine, which has led to uncertainty in global oil and gas markets and has sent energy prices soaring, IEA said.

According to IEA, Africa remains the least electrified region in the world with 568 million people without electricity access. Sub-Saharan Africa’s share of the global population without electricity jumped to 77% in 2020 from 71% in 2018, whereas most other regions saw declines in their share of the access deficits. While 70 million people globally gained access to clean cooking fuels and technologies, this progress was not enough to keep pace with population growth, particularly in Sub-Saharan Africa, IEA said.

The report finds that despite continued disruptions in economic activity and supply chains, renewable energy was the only energy source to grow through the pandemic, IEA said. However, these positive global and regional trends in renewable energy have left behind many countries most in need of electricity, it said. This was aggravated by a decrease in international financial flows for the second year in a row, falling to USD 10.9 billion in 2019, it added.

SDG 7 targets also cover energy efficiency. According to IEQ, from 2010 to 2019, global annual improvements in energy intensity averaged around 1.9%. This is well below the levels needed to meet SDG 7’s targets, and to make up for lost ground, the average rate of improvement would have to jump to 3.2%, it said.

In September 2021, the United Nations High-Level Dialogue on Energy brought together governments and stakeholders to accelerate action to achieve a sustainable energy future that leaves no one behind. In this context, the SDG 7 custodian agencies, the IEA, the International Renewable Energy Agency (IRENA), the United Nations Statistics Division (UNSD), the World Bank and the World Health Organization (WHO), as they launch this report, are urging the international community and policymakers to safeguard gains towards SDG 7; to remain committed to continued action towards affordable, reliable, sustainable, and modern energy for all; and to maintain a strategic focus on countries needing the most support.

According to IEA, key highlights on SDG 7 targets are…

Access to electricity.  The share of the world’s population with access to electricity rose from 83% in 2010 to 91% in 2020, increasing the number of people with access by 1.3 billion, globally. The number without access declined from 1.2 billion people in 2010 to 733 million in 2020. However, the pace of progress in electrification has slowed in recent years, which may be explained by the increasing complexity of reaching more remote and poorer unserved populations and the unprecedented impact of the COVID-19 pandemic. Meeting the 2030 target requires increasing the number of new connections to 100 million a year. At current rates of progress, the world will reach only 92% electrification by 2030.

Between 2010 and 2020, every region of the world showed consistent progress in electrification, but with wide disparities. Electricity access in sub-Saharan Africa rose from 46% in 2018 to 48% in 2020, but the region’s share of the global access deficit rose from 71% in 2018 to 77% in 2020, whereas most other regions, including Central and Southern Asia, saw declines in their share of the access deficits. Sub-Saharan Africa accounted for more than three quarters of the people (568 million people) who remained without access in 2020.

Renewables. Ensuring universal access to affordable, reliable, sustainable and modern energy implies accelerated deployment of renewable energy sources for electricity, heat and transport. Although there is no quantitative target for SDG 7.2, custodian agencies agree that the share of renewable energy in total final energy consumption (TFEC) needs to rise significantly, even though renewable energy consumption did continue to grow through the pandemic, overcoming disruptions to economic activity and supply chains. While the share of renewable capacity expansion rose by a record amount in 2021, the positive global and regional trajectories mask the fact that countries where new capacity additions lagged were those most in need of increased access. Moreover, rising commodity, energy and shipping prices as well as restrictive trade measures have increased the cost of producing and transporting solar photovoltaic (PV) modules, wind turbines, and biofuels, adding uncertainty for future renewable energy projects.

Renewable shares need to reach well over 30% of TFEC by 2030, up from 18% in 2019, to be on track for reaching net-zero-energy emissions by 2050. Achieving this objective would require strengthening policy support in all sectors and implementing effective tools to further mobilise private capital, especially in least-developed countries, landlocked developing countries and small island developing countries.

Energy efficiency. SDG 7.3 aims to double the global rate of annual improvement in primary energy intensity – the amount of energy used per unit of wealth created – to 2.6% in 2010-30 versus 1990-2010. From 2010 to 2019, global annual improvements in energy intensity averaged around 1.9%, well below the target, and the average annual rate of improvement now has to reach 3.2% to make up for lost ground. This rate would need to be even higher – consistently over four per cent for the rest of this decade – if the world is to reach net-zero-emissions from the energy sector by 2050, as envisioned in the IEA’s Net Zero Emissions by 2050 Scenario. Early estimates for 2020 point to a substantial decrease in intensity improvement owing to the COVID-19 crisis, as a result of a higher share of energy-intensive activities in the economy and lower energy prices. The outlook for 2021 suggests a return to a 1.9% rate of improvement, the average rate during the previous decade, thanks to a sharper focus on energy efficiency policies, particularly in COVID-19 recovery packages. However, energy efficiency policies and investment need to be scaled up significantly to bring the SDG 7.3 target within reach.

International Financial Flows. International public financial flows to developing countries in support of clean energy decreased for the second year in a row, falling to USD 10.9 billion in 2019, despite the immense needs for sustainable development in most countries and growing urgency of climate change. The amount was down by nearly 24% from the previous year and may be worsened by the pandemic in 2020. Overall, the level of financing remains below what is needed to reach SDG 7, particularly in the most vulnerable and least developed countries.

The decrease was seen in most regions, with the only exception in Oceania, where international public flows rose by 72%. The bulk of decreases were concentrated in East and Southeast Asia, where they fell by 66.2%; Latin America and the Caribbean, where they dropped by 29.8%; and Central and South Asia, where they declined by 24.5%.

Although the private sector finances most renewable energy investments, public finance remains key to attract private capital, including for creating an enabling environment for private investments, developing the needed infrastructure, and addressing perceived and real risks and barriers for investments in the energy transition. International public flows to countries that lack the financial resources to support their energy transitions constitute a large part of the international collaboration that will be needed for a global energy transition that would bring the world closer to achieving all SDGs.

Indicators and data for tracking progress. Tracking global progress for SDG 7 targets requires high-quality, reliable and comparable data for informed and effective policymaking at the global, regional and country levels. The quality of data has been improving through national and international cooperation and solid statistical capacity. National data systems improve as countries establish legal frameworks and institutional arrangements for comprehensive data collection for energy supply and demand balances; implement end-user surveys (e.g., households, businesses, etc.); and develop quality-assurance frameworks. However, after the pandemic hit and disrupted the rate of progress toward SDG 7, more investment in quality statistics is needed to know where we stand and how to get back on track. This is especially important for developing countries, particularly Least Developed Countries, to inform their national energy policies and strategies to ensure no one is left behind.

IEA: Global CO2 emissions rise to all-time high

BERKELEY, California, 11 March 2022: As You Sow, an advocacy non-profit that promotes environmental and social corporate responsibility, quoted the International Energy Agency (IEA) as saying that global carbon dioxide emissions (CO2) from energy combustion and industrial processes rose to their highest ever level in 2021. Making the announcement through a Press release, As You Sow added that a six per cent increase in 2021 pushed emissions to 36.3 gigatonnes, erasing the five per cent reduction in 2020, owing to the COVID-19 pandemic.

As greenhouse gas emissions continue to climb higher when the effects of climate change are increasingly being felt it highlights the need to go beyond targets and implement immediate tangible emissions reductions, As You Sow said.

More than 70 countries, accounting for more than 80% of global CO2 emissions and 90% of global GDP, have committed to net-zero, as have more than 5,000 companies, As You Sow said. In order to see progress critical for keeping global temperatures from rising beyond 1.5 degrees C, there is a need for companies to pursue ambitious near-term targets, robust transition plans detailing steps to achieve targets and leadership in advocating for sweeping climate policy, As You Sow added.

As You Sow’s recent report, Road to Zero Emissions scores companies on net-zero progress and is in step with the Intergovernmental Panel on Climate Change’s findings that near-term action is needed by prioritizing year-over-year emissions reductions aligned with 1.5 degrees C.

Danielle Fugere, President, As You Sow, said: “Investor value is being put at greater risk as emissions continue to rise. It is imperative for the safety of human society and the global economy that emissions are reduced immediately in line with the Paris Agreement. When it comes to climate change, we will not be given second chances, so the private sector must create climate transition plans that prioritize accountability and transparency.”

UN: Pandemic causes dip in building emissions

NAIROBI, Kenya, 19 October 2021: The economic consequences of the COVID-19 pandemic caused CO2 emissions from buildings and construction to fall significantly in 2020, but a lack of real transformation in the sector means that emissions will keep rising and contribute to dangerous climate change, according to the 2021 Global Status Report for Buildings and Construction.

The report, published by the UN Environment Programme-hosted Global Alliance for Buildings and Construction (GlobalABC), finds that in 2020, the sector accounted for 36% of global final energy consumption and 37% of energy related CO2 emissions, as compared to other end-use sectors.

While the level of emissions within the sector are 10% lower than in 2015, reaching lows not seen since 2007, this w333as largely due to lockdowns, slowing of economies, difficulties households and businesses faced in maintaining and affording energy access and a fall in construction activity. Efforts to decarbonize the sector played only a small role, the authors of the report said.

With large growth projected in the buildings sector, emissions are set to rise if there is no effort to decarbonize buildings and improve their energy efficiency, the authors said. In Asia and Africa, building stock is expected to double by 2050, they said, adding that global material use is expected to more than double by 2060, with a third of this rise attributable to construction materials.

“This year showed that climate change is an immediate direct threat to every community on this planet, and it is only going to intensify,” said Inger Andersen, Executive Director, UNEP. “The buildings and construction sector, as a major source of greenhouse gas emissions, must urgently be decarbonized through a triple strategy of reducing energy demand, decarbonizing the power supply and addressing building materials’ carbon footprint, if we are to have any chance of meeting the Paris Agreement goal of limiting global warming to 1.5C.”

Some progress, but not enough

The GlobalABC’s Global Buildings Climate Tracker found that there have been some incremental improvements in action to decarbonize and improve the energy efficiency of the sector.

In 2015, 90 countries included actions for addressing buildings emissions or improving energy efficiency in their Nationally Determined Contributions (NDCs) under the Paris Agreement. This number has now hit 136, although ambition varie, the authors of the report said.

Since 2015, an additional 18 countries have put in place building energy codes – a move that is crucial to shift emissions downwards – bringing the total to 80, the authors said. Local cities and governments have also developed codes, they said. Investment in energy efficiency rose to over USD 180 billion in 2020, up from 129 billion in 2015. Green building certification has increased by 13.9% compared to 2019, they said.

Overall, however, the report finds that these efforts are insufficient, both in terms of speed and scale. Other key findings of the report include: Two-thirds of countries still lack mandatory buildings codes; most of the increase in energy efficiency spending came from a small number of European countries; too small a share of finance goes into deep energy retrofits, and there is a lack of ambitious decarbonization targets in NDCs.

What comes next?

Energy demand in the buildings and construction sector is likely to rebound, as economic recovery efforts take hold and as pent-up demands for new construction are realized, the authors said.

By 2030, to be on track to achieving a goal of net-zero emissions by 2050, the International Energy Agency says that direct building CO2 emissions would need to decrease by 50%. Indirect building sector emissions will have to drop through a reduction of 60% in power generation emissions. To achieve these goals, the report finds, the sector has to take advantage of every lever.

While pandemic recovery spending has not sufficiently prioritized climate-friendly approaches to the level required, the authors said, there is still an opportunity to invest in decarbonizing our buildings while increasing their resilience:

  • Countries need to harness the sector’s transformative potential for achieving the energy transition.
  • Governments need to commit to further decarbonizing the power, as well as heating and cooling energy supply. This includes stepping up ambition in NDCs to include building decarbonization targets that contain the so-far largely overlooked embodied carbon and the emissions from the production of building materials.
  • The rate of growth of investment in building efficiency needs to double to over 3 per cent per year, and must expand beyond direct government investment to private investors.
  • Scope and coverage of building energy codes need to increase. All countries need to have in place mandatory building energy codes, and these would ideally address performance standards for building envelopes, design, heating, cooling, ventilation systems and appliances, and ensure links with integrated urban planning.

Buildings’ resilience needs to increase to futureproof our homes and workspaces. A typical building constructed today will still be in use in 2070, but the climate it encounters will have changed significantly.

  • The necessary interventions to reduce the climate impact of existing buildings should be combined with investing in adaptation and resilience measures.
  • In addition, both public and private sector need to seize the tremendous investment opportunities this sector offers – for example, through green bonds or through banks increasing green building construction and mortgage finance.

IEA releases ‘roadmap to net zero’ report

BERKELEY, California, 18 May 2021: The International Energy Agency (IEA) said it has published its first ever comprehensive roadmap to net-zero emissions by 2050. The report, it added, provides guidance for governments, companies, investors and the public on what is necessary to fully decarbonize the energy sector and lower greenhouse gas emissions to limit temperature rise to 1.5 degrees Celsius.

The report, it said, comes after it received widespread criticism for systematically underestimating the pace of adoption of clean energy technologies, such as solar and wind, and substantially overestimating their costs. Critics, it said, argued that IEA projections had effectively acted as support for the fossil fuel industry’s business-as-usual operations.

In a significant shift, the IEA said, it today recognizes that on a net-zero pathway there can be no investment in new fossil fuel supply. This, it said, includes oil, gas and coal projects. The IEA said, it confirms that with the introduction of policy to achieve climate stabilization at 1.5 degrees, the fossil fuel sector will face significant demand reduction.

Danielle Fugere, President, As You Sow, responding to the release of the report, said: “This new net-zero scenario from the IEA finally aligns with investor expectations and makes abundantly clear to fossil fuel companies that they must set net-zero targets, develop a clear transition strategy, and evolve in step with the decarbonizing global economy. Standing in the way of progress is no longer acceptable for companies’ own enterprise success or for the global economy.”

Daniel Stewart, Senior Research Associate, As You Sow, said: “Until now, the IEA’s research has been used to play down transition risks faced by the fossil fuel industry and as a support for inadequate energy and climate policy. IEA’s new scenario firms up what investors already knew about the steps needed to achieve climate stabilization by mid-century. It demonstrates without a doubt that it is difficult but absolutely possible to contain the catastrophic impact of runaway climate change, and signals major disruption on the horizon for industries reliant on fossil fuels.”

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