Energy Efficiency 2023
Dr Nicholas Howarth
IEEJ Global Energy Webinar, Tokyo, 21 February

Page 1

Energy Efficiency 2023 overview
1.

Recent trends in energy efficiency markets-2.

Energy intensity and demand
Energy prices and affordability
Sector and system-wide trends
Investment and employment
Policy progress updates

Key issues facing policy makers this year
-IEA 2024. CC BY 4.0.

Why is intensity progress slower this year?
What does doubling efficiency entail?
Record heat drives efficient cooling urgency
Energy crisis and gas in residential heating
Consumer benefits from system efficiency
Cooling in India and thermal comfort for all

Report available for free download athttps://www.iea.org/reports/energy-efficiency-2023
Page 2

Doubling global progress on energy efficiency

COP28 final text:
Calls on Parties to contribute to … doubling the global average annual rate of energy efficiency improvements by 2030
IEA 2024. CC BY 4.0.

Page 3

Energy intensity and demand trends

IEA 2024. CC BY 4.0.

Page 4

Efficiency policy momentum builds but energy intensity progress slows
Annual global primary energy intensity improvement, 2001-2022, 2023E, and by scenario, 2022-2030

Energy intensity progress slows to 1.3% in 2023 driven by higher global energy demand of 1.7%
Momentum builds around a global target to double 2022 rate of progress each year this decade to 4%IEA 2024. CC BY 4.0.

Page 5

Efficiency rate will determine the trajectory for global energy demand
Regional contributions to global changes in GDP and total energy supply, 2010 2023E and by scenario, 2022-2030

In the three key IEA scenarios energy demand grows at around 1% with current policies (STEPS)
Stabilizes with the announced climate pledges scenario (APS) and falls by about 1% in the Net Zero Scenario (NZE)
IEA 2024. CC BY 4.0. Sources: IEA (2023), Global Energy and Climate Model; IEA (2023), World Energy Balances

Page 6

Energy crisis is ongoing as retail energy prices remain elevated
Percentage change in consumer energy prices, year on year, September, selected countries

While commodity prices have fallen it can take time to feed through to energy bills
with cost of living pressures are still causing significant hardship for households and businesses
IEA 2024. CC BY 4.0. Source: OECD (2023), OECD Energy Consumer Price Index Database

Page 7

Higher retail prices are pushing up household energy expenditure
Average home energy expenditure per dwelling, 2021-2023

A decline in consumer transport prices has not been enough to lower energy bills overall
IEA 2024. CC BY 4.0. Sources: IEA (2023), Energy Prices; IEA (2023), Energy End-uses and Efficiency Indicators and IEA (2023), World Energy Balances

Page 8

Slower global progress hides transformations underway at country level
Annual primary energy intensity improvement, 2010-2023, NZE scenario 2022-2030

Since the crisis over 40 countries have reached or moved beyond the 4% level in the IEA Net Zero Scenario
IEA 2024. CC BY 4.0.

Page 9Energy intensity progress moves to record levels in Europe
Energy intensity progress, selected EU countries and the United Kingdom, 2022

In 2022 almost all EU countries experienced intensity change between 4% and 14%
IEA 2024. CC BY 4.0. Source: IEA (2023), World Energy Balances

Page 10

Peaking of fossil fuel demand in sight
Number of countries experiencing peaking or increasing of demand, residential gas and gasoline
Gasoline

Number of countries

Residential gas
5010040803060204010200

Decline or plateau
in demand

Increasing demand0

Decline or plateau
in demand

Increasing demandHighly efficient electrified technologies, like heat pumps and electric vehicles, are contributing
towards a peaking in demand for fossil fuels in certain sectors and countries.
IEA 2024. CC BY 4.0.

Page 11More efforts needed to reach efficiency levels for net zero globally
IEA tracking of the key elements related to energy intensity progressSub-sectors

Industry

Transport

Buildings
Technologies

Lighting
Heat pumps
Heating
Buildings envelope
Space cooling
Appliance & equipment

Technologies
Sub-sectors
Cars and vans
Electric vehicles
Rail
Trucks and buses
AviationInternational shipping

Electricity

Cross-cutting

Technology and infrastructure
Demand response
Grid-scale storage
Smart grids

Energy system overview
Energy efficiency
Electrification
Behavioural changes

Innovation
Digitalisation

On track

Sub-sectors
Light industry
Chemicals
CementAluminium
Paper
Steel

Infrastructure
Data centres & transmission networks
District heatingMore efforts neededNot on track

Between 2000 and 2022 energy intensity improved most in the buildings and transport sectors – by 25%
In industry energy intensity progress was slightly slower with 20%
IEA 2024. CC BY 4.0. Source: IEA (2023), Tracking Clean Energy Progress

Page 12

2023 was the hottest year on record:Implications for the future of cooling

IEA 2024. CC BY 4.0.

Page 13

COP28 Global Cooling Pledge comes amid year of global heat records
Surface air temperature anomaly for September 2023

64 countries have signed onto the COP28 Global Cooling Pledge which includes a commitment toincrease average efficiency of new AC units sold by 50% by 2030 compared to a 2022 baseline
IEA 2024. CC BY 4.0.

Source: https://climate.copernicus.eu/surface-air-temperature-september-2023

Page 14

Hot weather drives energy demand for air conditioning

Maximum daily electricity load (GW)Electricity load and maximum daily temperature, May-September, 2019 and 2023
80Texas (US)India

22020018060160
140401201002020 22 24 26 28 30 32 34 36 38 40Maximum daily temperature (°C)
20198020 22 24 26 28 30 32 34 36 38 40
Maximum daily temperature (°C)
2023

Every 1°C increase in the average daily temperature above 24°C drives a rise of about 4% in electricity
demand in Texas, and a 2% gain in India, where air conditioner ownership is much lower.
IEA 2024. CC BY 4.0.

Page 15More efficient air conditioners do not incur in higher upfront costs
Air conditioners (wall-mounted type) efficiency and cost in Latin America, Southeast Asia, and sub-Saharan Africa, 2023.

IEA 2024. CC BY 4.0.

Page 16

Policy coverage has been expanding significantly

Energy consumption covered (%)

Global energy consumption coverage of minimum energy performance standards for major end uses
100%
2000

80%
60%

2010

40%
20%

2023E

0%

Policy action on energy efficiency is translating into growing investment in efficienttechnologies
IEA 2024. CC BY 4.0.

Page 17

Evolution of energy efficiency
Electrification, digitalisation, renewables
integration and demand side management

IEA 2024. CC BY 4.0.

Page 18

Almost 1 in every 5 cars sold in 2023 were electricVehicle efficiency (tank to wheel) and weight, new vehicles, United States, 2023

An electric car can use between 50% to 80% less energy to travel 100 km
IEA 2024. CC BY 4.0.

Page 19

Strong global heat pump sales show signs of slowing
Annual growth for heat pump sales in buildings worldwide and in selected markets, 2021 and 2022

Currently around 100 million households or 1 in 10 use a heat pump for hot water and space heating needs
To meet net zero goals this will need to rise to 2 to 3 in10 homes by 2030
IEA 2024. CC BY 4.0.

Page 20

Increasing electrification of end uses and share of renewables

Share in percentage

Share of electricity in final energy consumption by sector and renewables share in electricity production, 2010-2022 and 2030
for the Net Zero by 2050 Scenario
70%
60%
50%
40%
30%
20%
10%
0%

Industry

Transport

Buildings

TotalElectrification level
2010

2015

Electricity production
Renewables share2022

2030 NZE

Expanded electrification of end uses such as EVs and clean cooking as well as rising consumption of appliancessuch as ACs create more variable energy demand which is not in line with the growing variability of production
IEA 2024. CC BY 4.0. Source: IEA (2023), Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach: 2023 Update.

Page 21

With more variable renewable energy – the role of efficiency evolves
Net electricity demand and wholesale prices in South Australia, hourly, January 2016 and 2023

A convergence of delivering energy savings, flexibility and localised renewables
IEA 2024. CC BY 4.0.

Page 22

Systems efficiency can help reduce consumer bills

700

MW600
1500

USD

2USD/MWhSite production, storage and consumption (left) and daily bill (right) of a large commercial energy user in South Australia on atypical day in 2023

4000300200-13 000
2 500
2 000
1 500
1 000

1000-200:00

04:00

08:00

12:00

16:00

20:00

-100

Solar PV output

Battery output

Site consumption

Wholesale price (right axis)

500
0Daily bill
without PVand batteries

Daily billwith PV

Daily billwith PVand batteries

Smart building systems can time energy consumption to help bring down energy costs by around 36%
IEA 2024. CC BY 4.0. Source: IEA analysis based on data from Schneider Electric.

Page 23COP28 Doubling energy efficiency progress

IEA 2024. CC BY 4.0.

Page 24

Doubling global progress on energy efficiency

COP28 final text:Calls on Parties to contribute to … doubling the global average annual rate of energy efficiency improvements by 2030
IEA 2024. CC BY 4.0.

Page 25

Energy efficiency achieved a very high prominence at COP28“Commit to work together in order to collectively double the global average annual rate of energy efficiency improvementsfrom around 2% to over 4% every year until 2030.” [132 countries]
IEA 2024. CC BY 4.0.

Page 26

What is the doubling goal?
Annual improvements in primary energy intensity (energy use per unit of GDP)
Primary energy intensity improvement

5%4%

3%2%1%0%

2001-10

2011-20

2021

2022

2023E

2022-30 NZE

The IEA’s Net Zero by 2050 Scenario sees a doubling of annual improvement to 2030
IEA 2024. CC BY 4.0.

Page 27

Key historical trends in national energy intensity progress
Average energy intensity improvement, 2010-2019

On average countries will need to increase to 4% annual energy intensity improvement (2023-2030)
IEA 2024. CC BY 4.0.

Page 28

Each country has a different starting point
Primary energy intensity trends, G20 countries, 2001-2022

In Russia it can takes around 3 times more energy to produce a unit of GDP that the UK or Türkiye
IEA 2024. CC BY 4.0.

Page 29

Achieving the 4% doubling target is in reach of all countries

Proportion of countries

Proportion of countries to surpass a 4% annual energy intensity improvement one or more times, 2012-2021​
100%
80%
60%
40%
20%
0%

At least oncein 10 years

At least twicein 10 years

At least three times
in 10 years

At least four times
in 10 years

At least five times
in 10 years

Over the past 10 years, almost every country has hit the 4% doubling rate at least once.
The challenge will be to consistently achieve it on average over this decade ​IEA 2024. CC BY 4.0.

Page 30

Doubling energy efficiency progress offers substantial rewards

IEA 2024. CC BY 4.0.

Page 31

Policies and technologies for doubling already exist
Minimum Energy Performance Standards, IEA Efficiency Policy Level Index end uses, global country range, 2023 and 2030

The technologies needed to achieve a doubling already exist, andpolicy thresholds are rapidly moving towards the required level.
IEA 2024. CC BY 4.0.

Page 32

IEA Annual Global Conference on Energy Efficiency• The 8th conference held in Versailles, June 2023
• 46 governments endorsed the goal of doubling global energy
efficiency progress by 2030
- 118 countries signed up to the pledge at COP28 so far
9th conference in Nairobi, 21-23 May 2024

IEA 2024. CC BY 4.0.

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