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Will the global energy shock trigger a global energy efficiency campaign? Maguire

By on October 23, 2022 0

The global energy market shock that has driven up electricity costs is causing a lot of pain, from soaring household utility bills to forced factory furloughs and massive government bailouts.

But the electricity crisis that has rocked major economies and industrial minnows this year also presents an opportunity to raise the efficiency levels of energy systems that have slowed rates of efficiency improvement in recent years.

Decades of relatively low and stable electricity prices have allowed many homes and businesses to overlook energy costs in their day-to-day existence, and in many cases have resulted in unnecessary energy consumption and delays in energy saving system upgrades.

But the synchronized spike in the costs of natural gas, coal and oil over the past year has now forced every consumer to reassess the true value of the energy they use at home, in their car and at work. , which has spurred a collective drive to reduce energy consumption in every facet of their lives.

The potential cumulative impact of such a large and simultaneous energy reduction push is substantial, with implications not only for the volumes of energy supply currently required by countries, but also for their emissions from the use of fossil fuels burned to generate electricity.

Alongside projected global expansions in renewable energy supply, this sustained collective reduction in total energy demand could help achieve the goal of reversing the trend of climate-affecting emissions.

REDUCTION OF ENERGY INTENSITY
A key measure of energy efficiency developed by research and consultancy firm Enerdata tracks the total amount of energy each country consumes to generate a unit of gross domestic product (GDP).

The so-called energy intensity of GDP allows different economies to be compared and ranked, and reveals that while globally energy intensity has steadily declined over time, several countries have struggled to reduce their energy intensity over time. beyond a certain point as populations grew and energy-intensive manufacturing and industrial sectors developed.

Indeed, several key fast-growing economies, including Saudi Arabia, Nigeria, Iran and Brazil, have actually bucked the downward trend in energy intensity and increased the amount of energy consumed. per unit of GDP since 2015.

Other economies with ambitions to develop industrial and manufacturing sectors, including India and Vietnam, are likely to do the same as demographic and capital spending trends align to create more workers and factories.

However, several major economies have also succeeded in reducing energy intensity while simultaneously increasing economic output, and can therefore serve as potential role models for other countries seeking to achieve ambitious goals on the economic and emissions reduction fronts. .

These success stories include China, which has reduced its energy intensity by 15% since 2015 while increasing its GDP by more than 60%, according to data from Enerdata and the World Bank.

Even after such a large decline in energy intensity, China has room for further reductions before joining the ranks of fully developed industrialized countries, including Germany and Japan, which had energy intensity rates of about half of China’s in 2021.

Beijing has targeted a further 13.5% reduction in industrial energy consumption per unit of output over the 2021-2025 period, which it aims to achieve by phasing out obsolete chimney factories and rolling out systems. more modern electricity production and distribution.

China also has ambitions to become a leader in clean energy technologies and will therefore likely seek to export energy-saving capabilities over the coming decades, just as homes, businesses and governments are poised. to adopt them on a large scale.

Similar products and processes are expected to emerge from Europe, the United States and elsewhere due to significant investments being made in space in direct response to soaring fossil fuel prices this year.

This means that global consumers should be spoiled for choice in terms of energy saving options once they recover from the shock of the current energy crisis and look to change their consumption habits. energy in the future.

The ten most energy intensive countries include key fast growing economies such as China, Nigeria and Saudi Arabia
Source: Reuters (reporting by Gavin Maguire; editing by Josie Kao)