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CLIMATE LEADER PAPERS

  1. Energy efficiency as the first fuel 23 November 2015

    Niels B. Christiansen, President and CEO, Danfoss

    Worldwide,Tech. & Innovation,Sustainable Energy,Carbon Reduction

As world leaders prepare for the final negotiations of the global climate agreement at COP21 in Paris this December, we must remind ourselves of the prerequisite for a low-carbon economy: the implementation and adaptation of the best available technology.

We know we need to look at four main sectors: buildings, transport, industry and power. In the power sector, for example, we need to implement more renewable energy and ensure a more intelligent grid; in transport we have to continue to improve mileage, optimise collective transportation, and in the long run ensure a cost efficient fuel switch. But what is often overlooked is the need for energy efficiency, in buildings and in industry. The International Energy Agency (IEA) estimates that compared to renewables, fuels switching, and CCS, energy efficiency is the largest contributor to global greenhouse gas (GHG) reductions.1)

From a financial point of view, increasing energy efficiency is an obvious choice. Not only is energy efficiency the most cost-efficient means to decarbonising the global economy, but investments in energy efficiency also pay themselves back within a relatively short time.

 

Reduced demand and lower bills

Socially, energy efficiency also provides benefits, such as reduced energy demand and lower energy bills for consumers, increasing disposable income and leading to higher consumer spending. In developing countries, improved energy efficiency for utilities makes more energy available for distribution to a greater number of households. In this way, energy efficiency policy measures provide affordable energy and access, and are an important tool to alleviating poverty while also improving productivity and competitiveness. In addition to these social and economic benefits, more efficient energy use can also significantly reduce greenhouse gas emissions.

Energy Efficiency is not just a question of technology. It is a question of mindset, smart thinking, governance and cost-effective solutions. These solutions exist and can be adopted immediately.

One example is in the building sector. The building sector accounts for approximately one-third of global energy use1) and is expected to account for 26 per cent  of all future energy efficiency savings2), primarily related to space heating and cooling, lighting and appliances. In new skyscrapers such as the Lotte World Tower in South Korea and in older hallmark buildings such as the Empire State Building, significant reductions in energy consumption and CO2 emissions have already been achieved with the implementation of energy efficient solutions.

In industry, the energy efficiency potential is significant. In China, the industrial sector is today the largest electricity consuming sector in the entire economy, equivalent to more than two-thirds of total electricity demand. Electric motors account for 60-70 per cent  of the industrial electricity demand, which creates a strong case for optimising electric motor systems – for instance, through variable speed drives which the IEA suggest are made mandatory. The situation is very similar when looking at India, where the industrial sector accounts for more than 40 per cent of the total electricity demand.3)

 

Technology adaptation

We have the products and technologies necessary to make significant changes in energy efficiency. Yet despite the strong business case and the ability to fast-track CO2 reductions, the potential of energy efficiency initiatives is far from being met. A key question today and in the post-COP21 world remains: How do we accelerate the adaptation of the best available technology?

The potential climate impact from using less energy is significant and the world has an obligation to seize this opportunity. We need to create frameworks that make it easier to overcome barriers such as funding, policy incentives, knowledge sharing, and education. In short; we must make it easy to become energy efficient.

In Paris in December, world leaders should ensure that the new global agreement enables greater uptake of energy efficient solutions. According to the IEA, energy efficiency should deliver nearly 40 per cent  of the required transformation within a 2ºC scenario, bringing CO2 reductions and significant financial savings.

Energy efficiency is an obvious solution to combating climate change, and we are on track when it comes to technology. But we absolutely need to speed up the implementation of low-carbon solutions, and a strong agreement in Paris could serve as a much welcome accelerator.

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1) SE4ALL 2014, EE Committee Report to the Advisory Board, page 9
2) IEA World Energy Outlook 2013, page 231
3) IEA World Energy Outlook Special Report on Energy and Climate, page 77-79 

 

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