The world is looking for clear commitments from governments, institutions and industry leaders to accelerate the change to a climate-friendly approach to how we live. Energy efficiency – the use of more efficient technologies or processes to reduce the amount of energy used – should be the cornerstone priority for all governments as it is the largest, cheapest, safest and fastest-to-deploy energy option.

Late last year, COP26 in Glasgow closed with a renewed commitment to limiting global warming to ‘well below 2°C’ above pre-industrial levels. The conference agreed that achieving its most pressing aim would require ‘rapid, deep and sustained reductions in global greenhouse gas (GHG) emissions’, including reducing global CO₂ emissions to net zero by 2050. COP26 established that momentum has shifted. Increasingly, nations, organisations and even individuals are committing to net zero targets.

Is net zero achievable? Yes, but it will take a Herculean effort. And, currently, the demand for systems and solutions to help the world meet that target is outpacing supply. So, what is the answer? What can we all do now?

The future is energy efficient

In short, we need to be much more energy efficient. The cleanest energy is that which is never used. Any push to net zero is doomed to failure if we don’t make better use of the energy we produce. Doing so is an urgent priority. Energy efficiency, along with wind and solar power, will provide half the emissions savings in the next decade in the International Energy Agency’s (IEA) roadmap for reaching net zero by 2050. ‘Without those efficiency gains, electricity demand growth would make it much harder for renewables to displace fossil fuels in electricity generation,’ says the IEA.

We currently waste more than half of that energy because of huge inefficiencies in the transmission and distribution network and at the point of use. For example, of 29mn homes across the UK, at least 19mn still need to be made climate resilient. That also means making them more energy efficient. 

In fact, domestic properties account for 30% of the UK’s energy use and around 19% of GHG emissions, according to the Department for Business, Energy and Industrial Strategy (BIES). The adoption of renewable energy will be key to our net zero ambitions, but energy efficiency has to be done in tandem with the drive for greater renewables usage. 

In 2020, 3.6 TWh of wind power was curtailed, enough to power 1mn homes for a year. Battery energy storage system (BESS) projects could have reduced this curtailment. Batteries present a massive opportunity to use energy more efficiently by storing and using power when needed rather than leaving it to be spilt and turbines blowing in the wind aimlessly.

Invest now for a sustainable future

If we are to reach net zero, all of this has to change, and we need to put capital behind purpose to accelerate the transition. The UK’s building stock will have to be made energy efficient, which is a huge task on its own. Significant investments will be needed not only in clean energy production, but also in the means to store and distribute it more effectively.

To some extent, this is already happening. In 2020, the government made £3bn available for energy efficiency in buildings. This included £2bn through a system of grants to cover up to two-thirds of the cost of energy efficiency measures up to £5,000, and £1bn to improve efficiency and introduce low carbon heating into schools, hospitals, prisons, military establishments and other public buildings. The National Infrastructure Strategy, meanwhile, sets out nearly £650bn of public and private investment for initiatives that can help the UK meet its climate targets. 

But we need to do more. 

A wealth of opportunities

For conscientious investors, all this presents a major opportunity. The UK urgently needs to upgrade its energy infrastructure. It needs to transform a woefully energy-inefficient housing stock. It needs to help its industry go green. 

Private capital will be crucial to this green energy revolution. We can’t modernise energy infrastructure and rapidly boost energy storage capacity without it. Government has a large part to play, of course, by committing to long-term policies that encourage investment in clean energy infrastructure, with most help likely to come from government assisting at the very early stage of a project’s development or supporting technologies when they are at the very early stage of implementation. 

The energy efficiency market is experiencing greater focus and projects can be implemented across the country, in different sectors including those hard-to-abate areas such as buildings and industry. 

But investors will be key to our cleaner, greener future. Energy efficient infrastructure projects offer an exciting way for anyone to play their part in the green recovery – for profit and purpose – and offer predictable, long-term cash flows from strong counterparties and use tried and tested technologies. 

We believe that investment can be a force for good, which is why our Triple Point Energy Efficiency Infrastructure Company (TEEC) channels funds into energy efficiency projects to make the UK energy system more sustainable. We owe a debt to the planet, nature and future generations to change how we use the limited resources we have available. 

Energy efficiency is a key tool to make better use of our resources in the near-term and for the long-term. The opportunity has to be grabbed now.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.