By doubling the rate of energy efficiency improvements by 2030, we can save the equivalent of all worldwide oil used in road transport today – saving 40mn b/d of oil, according to IEA estimates. What’s more, the technology needed to do this already exists and it’s the quickest and most cost-effective carbon abatement option.

What’s needed is an update on the narrative around energy efficiency and UK policy, to better reflect the role of energy efficiency in a future energy system based on renewables. This so-called ‘Energy Efficiency 2.0’ policy demands more than simply reducing demand and will become even more important as the clean energy transition accelerates.

In a world dominated by clean electricity, we must begin to think about how we can use that electricity as efficiently as possible. We need to electrify as many elements of our energy system as possible, while still aiming to decarbonise hard-to-abate sectors through hybrid electric technologies and the application of hydrogen and e-fuels.

For example, most renewables produce electricity, so we need to electrify wherever possible to use that renewable electricity. By transitioning from a fossil energy system to a fully electrified one, we can cut up to 40% of final energy consumption. Indeed, electrification is a form of energy efficiency, as most electric technologies have a lower rate of energy loss than a fossil-driven equivalent.

Take heat pumps, which are three to five times more efficient than fuel-based heating alternatives, according to the IEA. Or electric vehicles, which have an energy loss of only 15–20% compared to 64–75% for internal combustion engines.

We must also implement systems to power homes, buildings and industry when renewable energy is not plentiful, such as when the sun doesn’t shine or the wind isn’t blowing. In other words, we need to find ways to better align renewable energy supply with demand.

This will be done by reducing peak energy consumption periods through demand-side flexibility – using energy at the right time – as well as storing and converting electricity when we have too much. Similarly, future demand for green electricity will be enormous, we therefore need to tap into alternative sources of clean energy, such as using excess waste heat and recycling it through district heating systems.

Excess heat: the world’s largest untapped source of energy 
Excess heat is the ‘sleeping giant’ of energy efficiency. In the European Union (EU) alone, excess heat amounts to 2,860 TWh/y, according to Waste2Wealth Solutions, corresponding almost to the EU’s total energy demand for heat and hot water in residential and service sector buildings. Much of the excess heat released into the atmosphere every day could be captured and reused.

Every time an engine or machine runs it generates heat. Excess heat is a byproduct of most industrial and commercial processes.

However, without action, up to 53% of the global energy input will be wasted as excess heat by 2030, according to a paper in Applied Energy (2019). What’s more, there are countless sources of excess heat in virtually every city.

In London alone, there are 652 eligible excess heat sources, including data centres, underground stations, supermarkets, wastewater treatment plants and food production facilities. The excess heat from these sources adds up to 9.5 TWh/y.

Excess heat has astonishing potential as an energy source at scale. It can replace significant amounts of electricity or gas that are otherwise needed to produce heat, and can help ease the transition towards a cleaner and more stabilised energy system.

In future energy systems, energy efficiency must take centre stage and work in harmony with the build out of renewables and electrification to meet our climate goals, ensure energy security, boost the economy and fundamentally transform the way energy is governed and consumed. 

Your supermarket can help heat your home 
As some of the most energy-intensive commercial buildings, supermarkets have a key role to play in the green transition. In the UK, energy demand from supermarkets is responsible for approximately 3% of the nation’s electricity production, claims the IEA, with much of that energy used for cooling. Meanwhile, keeping food fresh in cooling displays and freezers generates significant excess heat.

This excess heat is currently released into the air without any effort to reuse it. However, the heat can be reused in the supermarkets themselves to heat space or to provide warm water. All that’s required is for supermarket owners to deploy proven technologies, which can also contribute to significant energy bill savings.

This is not blue sky thinking. One supermarket in Denmark already covers 76% of its heat consumption by re-using heat recovered from cooling processes (see Box below).

On track for reducing demand 
Another promising application of excess heat reuse lies below our feet. Anyone who has travelled on an underground or metro system, especially in the summer, will be familiar with the heat that is generated by subway transport. Why isn’t this heat being put to good use?

One city that is trying to answer this question is Warsaw. With a population of 1.8 million people, Warsaw is Poland’s busiest city. It has a particularly active, and therefore hot, Metro system. Indeed, 62 GWh of heat is wasted from Warsaw’s Metro stations each year.

Warsaw is well-placed to capture and re-use this excess heat due to its well-developed district heating system. The system consists of more than 1,800 km of pipes delivering hot water to and from the city’s buildings. But while Warsaw’s district heating system gives it a head start on energy-efficient heating, there is a near-total reliance on four fossil-fuelled plants to deliver the heat to the district heating system.

To capitalise on Warsaw’s abundant sources of excess heat, especially from the Metro system, Danfoss, the Municipality of Warsaw, Royal Danish Embassy in Poland, Metro Warszawskie, and Ramboll Group signed a memorandum of understanding in February 2024 to determine how Warsaw can recover excess heat from the Metro system and integrate it into the district heating system to heat the homes, businesses and domestic water across the capital. Other partners in the Danish-funded project are GEA DK, Bjerg Akitektur and Elogic.

Meanwhile in London, a disused tube station in Islington has been converted to an energy centre, the Bunhill 2 Energy Centre, that recycles the heat produced by the Underground to be used by nearby housing estates. The scheme recycles the waste heat to provide heating and hot water to more than 1,350 homes, a school and two leisure centres in Islington.

How policy makers can make Energy Efficiency 2.0 a reality 
In future energy systems, energy efficiency must take centre stage and work in harmony with the build-out of renewables and electrification to meet our climate goals, ensure energy security, boost the economy and fundamentally transform the way energy is governed and consumed. For Energy Efficiency 2.0 to become a reality, the regulatory framework must be implemented now.

Saving energy and electrifying everything across transport, industries and buildings must be a priority.

To supplement demand, capturing and reusing excess heat will be necessary, and we must utilise ‘green hydrogen’ produced with renewable energy as a means to decarbonise and indirectly electrify sectors in which full decarbonisation is not yet possible.

Energy Efficiency 2.0 is the fastest and most cost-efficient way to turn a 2050 net zero scenario into a reality. The good news is that we already have the necessary technology. But we need immediate political action to scale the solutions.

• Further reading: ‘Heat pumps, refrigerants and UK district heating networks’. Lee Hermitage of Honeywell Advanced Materials focuses on the advantages of the refrigerant used with heat pumps being installed for in one district heating system in London.
• Find out more on recent progress in the district heating sector in the UK.