According to the International Energy Agency’s (IEA) latest report, Energy Efficiency 2022, global investments in energy efficiency reached US$560bn in 2022, an increase of 16% on 2021
The data from the IEA indicates that in 2022 the global economy used energy 2% more efficiently than it did in 2021. If the current rate of progress can be built upon, then 2022 could mark a turning point for efficiency which is a key area to reach net zero by 2050.
IEA executive director, Fatih Birol, commented, “The oil shocks of the 1970s led to a massive push by governments on energy efficiency, resulting in substantial improvements in the energy efficiency of cars, appliances and buildings. Amid today’s energy crisis, we are seeing signs that energy efficiency is once again being prioritised. Energy efficiency is essential for dealing with today’s crisis, with its huge potential to help tackle the challenges of energy affordability, energy security and climate change.”
This year’s improvement comes after Covid-19 led to two of the worst years ever for global energy efficiency progress, with annual gains falling to around 0.5% in 2020 and 2021. Key factors included a higher share of energy-intensive industry in energy demand as other sectors contracted and a slowing pace of retrofits and upgrades in buildings and factories.
Efficiency improvements need to average about 4% a year this decade to align with the IEA’s Net Zero Emission by 2050 Scenario but there are encouraging signs of progress. The electrification of transport and heating is accelerating, with one in every eight cars sold globally now electric. Existing building codes are being strengthened and new ones are being introduced in emerging and developing economies, while a rising wave of energy saving awareness campaigns is helping millions of citizens better manage their energy use.
While several significant policy and spending announcements point to continued efficiency investment, these tend to be concentrated in advanced economies. The IEA has noted, therefore, that there needs to be greater investment in emerging and developing economies in the future.