Interview — Energy efficiency benefits us all

Why should we invest in energy efficiency?

Energy efficiency can be summarised as delivering more output and services using the same energy input, or delivering the same output with less energy input. For example, we obtain the same levels of light with LED bulbs, but they use about 80 % less energy and have much longer lifetimes compared with traditional incandescent bulbs.

Energy inefficiency actually occurs across the entire energy supply chain — from extraction, conversion, transport and transmission to final use. Increasing the energy efficiency of buildings not only improves indoor air quality and comfort, but also reduces energy bills and boosts jobs in areas such as construction, insulation and heating and cooling systems. In the transport sector, there are also co-benefits. With the global vehicle fleet set to triple by 2050, many countries are adopting fuel economy standards that reduce dependence on oil, greenhouse gas emissions and air pollution.

The rapid growth of electric vehicles in the last few years has been supported by an array of complementary policies and measures introduced in some countries. Norway, for example, has enacted a long list of preferential policies for zero-emission cars since the 1990s and set a target of making all cars sold in the country electric by 2025. This suite of policies has helped shape consumer and supplier expectations and, in 2016, made the fleet of plug-in electric vehicles in Norway the largest per capita in the world.

What are the links between energy and sustainable development?

Energy efficiency improvements are also a powerful but often overlooked driver of energy access that provides optimism for the 1 billion people still lacking access to electricity. For example, off-grid energy supply coupled with efficient appliances can help to deliver sufficient amounts of affordable and clean energy, while also contributing to sustainable development. In fact, interlinking energy efficiency with both energy access and renewable energy is necessary to deliver Goal 7 of the United Nations’ Sustainable Development Goals (SDGs), which aims to ‘ensure access to affordable, reliable, sustainable and modern energy for all’ by 2030. Energy is considered ‘crucial for achieving almost all of the SDGs, from its role in the eradication of poverty through advancements in health, education, water supply and industrialisation, to combating climate change’.

Is there a ‘silver bullet’ for achieving energy efficiency?

Energy efficiency offers a cost-effective opportunity for governments, the private sector and the community to achieve various goals, whether they are energy reductions, emission mitigation, financial savings, energy security, health benefits or something else. Based on my experience, it is clear that there is no one-size-fits-all solution or way of achieving energy efficiency for different regions, countries or cities.

Setting ambitious targets is important to drive actions, as well as setting up institutional frameworks, national strategies and effective policy packages that combine regulations, incentives, capacity building and information instruments. All of these activities need to be supported by the provision of robust data, enforcement, monitoring and evaluation.

Where to start?

It makes sense to prioritise action in the specific sectors where the potential to improve energy efficiency is the greatest. Sectoral energy consumption and the mix of fuels involved often vary widely. In an area where a significant share of energy is used for industrial activities, authorities might prioritise measures such as supporting the adoption of energy management systems. Alternatively, in an area where a large share of energy is used to heat and cool inefficient buildings, it makes more sense for the government to focus on improving the efficiency performance of the local building stock by using building codes and certification and encouraging the development of net-zero energy buildings. In an urban area struggling with congestion problems, authorities might prioritise investments in public transport solutions, such as bus rapid transit systems. Currently, about 35 million passengers across 206 cities around the world are using bus rapid transit systems, which deliver innovative, high-capacity, lower cost public transit solutions that are improving urban mobility and reducing air pollution.

Technological innovation in the private sector is also playing an increasingly important role. For example, innovations in energy storage, connectivity and smart energy systems are being led by companies such as Tesla, Danfoss and Siemens, among many others.

Do energy prices have an impact on energy efficiency?

Price is a very strong incentive for consumers to reduce energy use and shift towards greater efficiency. Energy efficiency policies often struggle to work when energy prices are subsidised, because the low energy prices influence the economic returns of energy efficiency. We are seeing a growing number of countries committing to reform these subsidies, with some countries exploring options to shift subsidies from energy suppliers to end users.

Many technical solutions are currently available to enable immediate actions in accelerating energy efficiency. The use of smart metering and billing is a good example. Many consumers pay their energy bill every 3 months and are not aware of the opportunities to achieve greater efficiency through changing technologies or modifying behaviours. Consumption information provided to end users can help change energy use and improve energy efficiency. Some countries provide targeted analysis and information in their energy bills to allow households to compare their electricity usage with similar households in local communities. Other households prefer real-time information, via smartphones or in-home displays, which gives householders the opportunity to modify actions and behaviours before they are billed.

Strong demand signals from consumers for efficient refrigerators and air conditioners can also drive companies to innovate and offer more energy-efficient products.

Who needs to be involved and informed?

Energy efficiency is a fragmented field involving multiple stakeholders, including governments, the private sector, international organisations, financiers and civil society, among others. All stakeholders need to be empowered with data and information to make informed decisions linked to high-level targets, policies, programmes and investments.

The Copenhagen Centre is well placed to play a central coordinating role in targeted high-impact locations and is supporting the acceleration of energy efficiency actions at global, national and city levels. In the context of the United Nations Secretary General’s initiative Sustainable Energy for All, we act as a thematic hub on energy efficiency. In this context, we contributed, among other things, to the development of sources of knowledge such as the World Bank’s Regulatory Indicators on Sustainable Energy (RISE) initiative.

Tim Farrell
Senior Advisor
Copenhagen Centre on Energy Efficiency, part of the United Nations Environment Programme (UNEP) DTU Partnership

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