Global energy efficiency progress slows again

The rate is lower than the 1.7% efficiency improvement seen in 2017 and marks the third consecutive year that the figure has declined. It is well below the 3% minimum the IEA suggests is central to achieving global climate and energy goals. 

The slowdown represents a lost opportunity, says the report. It finds that, although the 1.2% improvement in energy intensity meant that the world generated $1.6tn more GDP for the amount of energy used compared to 2017, this figure would have been $4tn had energy intensity improved at 3% every year since 2015. 

Factors behind the recent slowdown include an increase in the use of energy-intensive primary fuels, such as coal, for electricity generation. Coal-fired generation increased by 3% in 2017 and 2.5% in 2018, after three years in which growth was either flat or negative. 

On the demand side, extreme weather – particularly in the US, which had a particularly cold winter and warm summer – drove up the energy demand for heating and cooling. Shifts in the composition of economic output towards energy-intensive industries – such as steelmaking in countries like China and the US – also contributed. 

The report further finds that longer-term structural changes have largely offset the rates of improvement in technical efficiency. For example, efficiency gains in road transport have been offset by people using more energy-intensive modes of transport, buying larger vehicles and travelling with fewer people per vehicle. 

‘The historic slowdown in energy efficiency in 2018 calls for bold action by policy makers and investors,’ said Dr Fatih Birol, the IEA’s Executive Director. ‘We can improve energy efficiency by 3% per year simply through the use of existing technologies and costeffective investments. There is no excuse for inaction: ambitious policies need to be put in place to spur investment and put the necessary technologies to work on a global scale.’ 

The IEA points to energy efficiency as a crucial tool in limiting carbon dioxide (CO2) emissions, reducing energy consumption and enabling social and economic development. However, despite energy efficiency’s potential, the IEA asserts that the world is struggling to capture its full benefits, as global energy demand continues to increase and CO2 emissions are at record levels.