It is now very clear that energy efficiency can reduce fuel import dependence, reduce the risk of energy price volatility, and help mitigate climate change while making systems and societies more resilient.While Europe is on the front lines, these issues are global in nature, as we have seen from the broad interest in our 10-point plan.So what are the key measures to quickly reduce energy demand?
The key measures identified in the ten-point plan relate to improving the efficiency of homes and other buildings.This includes upgrading insulation, speeding up the installation of heat pumps, installing digital thermostats, and helping small businesses become more efficient.It also includes encouraging people to take action by lowering the temperature of their heating thermostats.The current average temperature for heating buildings across the EU is above 22°C.Adjusting the thermostat for heating a building by 1 degree can save up to 10 bcm of gas demand per year, equivalent to Austria’s annual gas demand.These are actions relevant to countries and citizens of the world.
While the rationale for accelerating sustainable building retrofits is not debated, putting them into practice is more challenging.
To consumers, renovations can seem complicated, time-consuming and expensive.Homeowners rarely have the time to become experts in all aspects of renovations; they are looking for a trusted party to advise and develop a step-by-step process, preferably online quickly.Even if they know what they want, skilled labor and materials are often hard to find.
Cities and regions can act as trusted partners throughout the renovation process, supporting citizens while paving the way by renovating public buildings.Examples include Hauts-de-France Pass Rénovation in France, Shared City in Milan, Opengela in the Basque Country, SuperHomes in Ireland, FIPATERM in Mexico or the Barcelona Sustainable Energy Mechanism in Spain, a public-private partnership initiative.
Governments can support effective retrofit programmes as part of their long-term climate plans.For example, under its Recovery and Recovery Plan, Spain intends to invest 3.4 billion euros in 500,000 energy retrofit operations through tax incentives and the creation of “one-stop” retrofit offices.Many countries have made similar announcements recently.
We examine efforts to scale up sustainable building retrofits in the context of the Covid-19 economic recovery and uncover some lessons to be learned and tips for success:
These actions can greatly stimulate the market and lead to an increase in sustainable renovation projects.
One aspect of the IEA’s 10-point plan that has received much attention is turning down the thermostat by 1 degree.For most people, it’s really a small sacrifice in the current situation, as a lot of people are asking what they can do to help.The message resonated widely.
Finding ways to encourage energy users to change their behavior isn’t always easy, but it can be done.Our analysis points to the importance of good design, collaborating with behavioral scientists and experts to deliver targeted information that can have lasting impact.
Simple actions are often effective.In India, for example, air conditioning regulations require manufacturers to set the default temperature for new equipment to 24°C.This means that when someone buys an air conditioner, by default it cools down to 24°C, not say 22 or 20°C.Consumers are free to adjust, but many don’t, unknowingly saving energy.
Now is the perfect time to think about behavior, and there are some successful precedents where communities and businesses act together in the face of emergencies.
An important case was Japan in 2011, when an earthquake and tsunami caused nuclear power plants to be removed from the power system, causing severe shortages of electricity supply.The whole of society has acted in response to this crisis.Short-term demand reductions are at the heart of the response—in 2014, compared with 2010, electricity use in industry fell by 12%, households by 10%, and services by 4%.
This is achieved through government actions such as energy allocation for large-scale industries, technical energy-saving assistance and extensive information campaigns.Large industry and SMEs responded in solidarity by changing working hours.Five years later, action on the demand side has compensated for nearly half of the drop in supply caused by the shutdown of nuclear plants.Efficiency gains have been largely maintained, and gains continue to increase today.
In 2007 and 2008, Chile experienced power shortages due to drought.Chile avoided power outages by implementing a package of measures, including a public awareness campaign and a plan to distribute high-efficiency lighting.Governments provide long-term financing for energy efficiency investments, implement rationing, extend daylight saving time, and provide financial incentives for energy savings—actions that build on advocacy campaigns to stimulate continued energy savings.
These examples show what happens when emergencies drive massive, whole-of-society responses.After the first oil crisis in 1973, Denmark reduced its vulnerability by drastically reducing its dependence on imported oil, diversifying its energy mix, and developing an ambitious and broad energy-efficiency policy mix.Before the crisis, nearly all buildings were heated with oil; most electricity was generated using oil.Through subsidies and other measures, the share of oil-based electricity generation fell from 64% to 37%, and further fell to 5% by 1983.Denmark’s active energy policy now focuses on energy efficiency in buildings, district heating systems and industry, coupled with an ambitious use of renewable energy.Denmark today is one of the most energy efficient countries – since 1975 the energy consumption to heat one square meter of residential buildings has been reduced by almost 50%.It has also become a global leader in many clean energy technologies and services.
These examples show that citizens and businesses can pull together to achieve measurable changes in energy demand, with urgent government needs and guidance.The current crisis presents a unique moment – high prices are drawing attention to the importance of efficiency, and a strong sense of solidarity with the Ukrainian people is spurring behavioral changes, such as voluntary use of less energy in various ways that are often not possible.
In addition to advocacy campaigns and incentives, digitization can use data and analytical tools to identify where energy efficiency interventions can yield the greatest benefits.Smart meter data can give policymakers a better understanding of how people use energy and can help consumers understand their energy usage and how to reduce costs.
Access to real-time data can also help reduce power demand during peak hours, thereby reducing overall power system costs and emissions.
Digitization can also provide real-time information on the impact of energy usage, which can influence user behavior.There are many tools that can help people understand the efficiency of their appliances or heating systems and help them easily find more efficient alternatives.
Automation technology also supports efficiency, such as using sensors to turn off lighting when no one is in the room, or setting energy-saving modes when no one is home.
It is important to incorporate short-term actions into long-term goals, such as net-zero goals, enhancing energy security and resilience, and reducing consumer costs.The IEA’s Global Energy Efficiency Emergency Action Committee has conducted a detailed review of this aspect, and its recommendations help inform policy action now.
The Commission took an action-oriented approach to rapid energy efficiency improvements.It focuses on issues such as finance, innovation and public engagement.
A key point of the committee is the importance of a whole-of-government response, which is critical to coordinating intergovernmental responses and removing barriers.Efficiency success depends not only on the actions of ministries responsible for energy, but also on the actions of housing, industry, transport, finance, etc., not to mention the importance of action at the city level and by local governments.
While we are already seeing signs of governments taking a more coherent policy approach to climate and net-zero targets, delivering such a unified approach will not be easy.The current crisis, and its widely recognized energy challenges, underscore the need for concerted efforts and a coordinated response.
Governments have shown great potential to mobilize, coordinate and respond quickly in the face of emergencies, taking actions that are not easily taken at other times.
For example, in response to the Covid pandemic, many cities around the world have rapidly expanded the creation of bike lanes and lanes to encourage more cycling.
An obvious challenge is increasing funding, although we know that efficiency spending can reduce consumer pressure and reduce reliance on energy imports.Today’s challenges are more compelling than ever.One example is Super Ecobonus in Italy, which provides a 110% tax credit for energy-efficient retrofits of residential buildings.Launched in 2020, the measure has brought in over €20 billion in eligible investments and created thousands of jobs.There are many other ways to inject additional funding for efficiency, such as grant schemes currently expanding in countries such as Ireland, Canada and the Netherlands.
Now is also the time to consider how to reduce red tape to provide faster efficiency of action.For example, the availability of labor and contractors for home upgrades varies widely across Europe.In some countries, the upgrade wait time is only a few weeks, in others years.However, companies face hurdles even in different countries where demand is high due to a host of local certification rules and barriers to labor mobility.Quality, safety and other considerations are essential, but now is certainly a good time to consider how the rules can be harmonized to simplify the sport.There is also a strong case for increased training, such as training energy auditors and consultants, and mobilizing more people to join the energy efficiency workforce.
Short-term actions should not come at the expense of long-term goals.A key area is customer experience and general perceptions of energy efficiency interventions.Bad experiences with home upgrades, disappointing results, poor communications, or low-quality technology could cost people energy efficiency for years to come.It is critical that governments do not compromise when scaling up.The actions we take now to accelerate short-term progress should set the stage for larger, more successful actions in the future.Projects that work well, are easily accessible and truly improve people’s lives will build a lasting positive reputation for energy efficiency and clean energy more broadly.Whether it’s bringing affordable lighting to rural homes in India, a cooling upgrade program in Colombia, or reducing home energy bills in Canada, there are many examples of successful and welcome energy efficiency actions that have delivered short- and long-term benefits .
We face a critical moment.Energy efficiency is central to achieving net zero and is increasingly important for energy security and affordability.Driven by market volatility and deep concerns about energy security and where our energy comes from, global awareness of this fact has never been higher.Citizens are ready to make changes, whether it’s because of higher prices or solidarity with Ukraine, or both, and the government sees the case for action more clearly than ever.
Energy efficiency can deliver immediate benefits by reducing demand, while also setting us on the path to longer-term, deeper benefits.The IEA is learning from global experience and working directly with governments around the world to achieve this.
The upcoming IEA 7th Global Energy Efficiency Conference will bring together ministers and many key decision makers from government, industry and civil society to focus on how to translate international energy efficiency ambitions into faster and stronger real-world progress.A special session will allow ministers to discuss what measures can be replicated and scaled up, and what policy innovations can be harnessed to improve energy efficiency, not in theory but in practice.
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