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首页文档碳中和资料研究报告能源需求转型白皮书（英文版）--世界经济论坛

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Transforming
Energy Demand
WHITE PAPER
JANUARY 2024
In collaboration
with PwC
Images: Getty Images
© 2024 World Economic Forum. All rights
reserved. No part of this publication may
be reproduced or transmitted in any form
or by any means, including photocopying
and recording, or by any information
storage and retrieval system.
Disclaimer
This document is published by the
World Economic Forum as a contribution
to a project, insight area or interaction.
The findings, interpretations and
conclusions expressed herein are a result
of a collaborative process facilitated and
endorsed by the World Economic Forum
but whose results do not necessarily
represent the views of the World Economic
Forum, nor the entirety of its Members,
Partners or other stakeholders.
Contents
Foreword
Executive summary
1 Why transforming energy demand matters
2 The three energy demand levers
3 Business solutions – overall approach
4 Business solutions – selected interventions for change
in buildings, industry and transport
4.1 Industry
4.2 Buildings
4.3 Transport
5 Government leadership
Conclusion
Appendix
A1 Modelling methodology
Contributors
Endnotes
3
4
5
11
13
15
16
24
29
33
37
38
38
40
44
Transforming Energy Demand 2
Foreword
As the global energy system undergoes a rapid
transformation, leaders across all sectors need to
collaborate to accelerate an energy transition that
creates positive outcomes for people, society and
the planet. The private sector can play a leading
role in driving this transformation.
That is why a year ago, the International Business
Council (IBC), a group that together represents 3%
of global energy use, decided to focus on energy
demand. This is an under-addressed area that
will allow us to increase economic output, while
reducing greenhouse gas emissions (GHG) and
driving up global access to energy.
Our research shows that there are many tangible
actions that all businesses can take today to act on
energy demand. The potential of this demand-side
action is extraordinary, offering a short-term,
cost-efficient 31% reduction of demand, shared
across all economic sectors. These gains are
deliverable now, at attractive returns, needing no new
technology. Such concerted action would unlock
growth and productivity while getting the world
back on track to meet the targets sets by the Paris
Agreement. At the same time, it would support
delivery of the pledge by over 120 countries at
COP28 to double the global average annual rate of
energy efficiency improvement.
These findings should be exciting for all leaders,
in growth and mature markets alike, and we thank
all the IBC members for their support in driving
this work. Our ambition is to get the world to act
as much on energy demand as supply its efforts
to reach net zero. We hope this paper will inspire
many other businesses and governments to join
this effort. There is no time to lose.
Ana Botin
Executive Chairman,
The Santander Group;
Chair, International
Business Council
Bob Moritz
Global Chair, PwC; Member,
International Business Council
Olivier Schwab
Managing Director,
World Economic Forum
Transforming Energy Demand
January 2024
Transforming Energy Demand 3
/46
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IncollaborationwithPwCTransformingEnergyDemandWHITEPAPERJANUARY2024Images:GettyImagesContentsForeword3Executivesummary41Whytransformingenergydemandmatters52Thethreeenergydemandlevers113Businesssolutions–overallapproach134Businesssolutions–selectedinterventionsforchange15inbuildings,industryandtransport4.1Industry164.2Buildings244.3Transport295Governmentleadership33Conclusion37Appendix38A1Modellingmethodology38Contributors40Endnotes44DisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.©2024WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.TransformingEnergyDemand2January2024TransformingEnergyDemandForewordAnaBotinBobMoritzOlivierSchwabExecutiveChairman,GlobalChair,PwC;Member,ManagingDirector,TheSantanderGroup;InternationalBusinessCouncilWorldEconomicForumChair,InternationalBusinessCouncilAstheglobalenergysystemundergoesarapidcost‑efficient31%reductionofdemand,sharedtransformation,leadersacrossallsectorsneedtoacrossalleconomicsectors.Thesegainsarecollaboratetoaccelerateanenergytransitionthatdeliverablenow,atattractivereturns,needingnonewcreatespositiveoutcomesforpeople,societyandtechnology.Suchconcertedactionwouldunlocktheplanet.Theprivatesectorcanplayaleadinggrowthandproductivitywhilegettingtheworldroleindrivingthistransformation.backontracktomeetthetargetssetsbytheParisAgreement.Atthesametime,itwouldsupportThatiswhyayearago,theInternationalBusinessdeliveryofthepledgebyover120countriesatCouncil(IBC),agroupthattogetherrepresents3%COP28todoubletheglobalaverageannualrateofofglobalenergyuse,decidedtofocusonenergyenergyefficiencyimprovement.demand.Thisisanunder-addressedareathatwillallowustoincreaseeconomicoutput,whileThesefindingsshouldbeexcitingforallleaders,reducinggreenhousegasemissions(GHG)andingrowthandmaturemarketsalike,andwethankdrivingupglobalaccesstoenergy.alltheIBCmembersfortheirsupportindrivingthiswork.OurambitionistogettheworldtoactOurresearchshowsthattherearemanytangibleasmuchonenergydemandassupplyitseffortsactionsthatallbusinessescantaketodaytoactontoreachnetzero.Wehopethispaperwillinspireenergydemand.Thepotentialofthisdemand‑sidemanyotherbusinessesandgovernmentstojoinactionisextraordinary,offeringashort-term,thiseffort.Thereisnotimetolose.TransformingEnergyDemand3ExecutivesummaryActionsonenergydemandcanbetakenbyallcompaniesnow,areprofitableandcanaccelerateprogresstowardsclimategoals.Thevalueofactiononenergydemandiseconomicoutput.Affordabilityisalsoclear,withcompelling:apossible31%reductioninenergyinterventionspotentiallyfullypaidbackgloballyintensityandupto$2trillioninannualsavingswithinadecade,drivingestimatedannualsavingsifmeasuresweretobetakenby2030(seeintherangeof$2trillion.Appendix,A1:Methodology).Reducingenergyintensity–energyusedperunitofgrossdomesticThreeleverscandeliverthischange.First,product(GDP)–wouldboostgrowthbyenabling“energysavings”–operationalimprovementpreviouslywastedorover-utilizedenergytobeinterventionsfundedthroughoperatingexpenditureredirectedtomoreproductiveactivities.Itwouldalso(OpEx).Resultsaretypicallyimmediatebutoftenhelpcompaniessavecashandmaintaincompetitiveoverlookedastheyrequirecoordinatingmanyadvantagewhilereducingemissions.Thispaperinterventionsacrossanorganizationandconstantoutlinesthevalueofactionsonenergydemandfromenergycostimprovement.“Energyefficiency”poolstheprivateandpublicsectorsandhowtodelivermeasuresunderdirectcompanycontrolthatrequirethem.Actionsaredoabletoday,atattractivereturnscapitalexpenditure(CapEx).Together,savingsandwithexistingtechnology,andsoitisbelievedthisefficienciesofferbusinessesthelower-hangingfruitestablishesacompellingcasetoactasmuchonandatleasthalfoftheimprovementsinenergyenergydemandassupplyinthejourneytonetzero.intensitythatthisresearchhasidentified.Thefinalleveris“valuechaincollaboration”,whereworkingFindingawaytoreduceorevenreversedirectlywithsuppliersandbusinesspartnersoffersthepaceofenergydemandgrowthwhilecompanyagencyoverenergyimpact,reducingcostsupportingeconomicoutputiscritical.Byandgettingaheadoftheracetonetzero.2050,theworld’spopulationwillgrowbytwobillion,andGDPisforecasttodouble.EmergingEachsectorneedsa“roadmap”toguidemarketsanddevelopingeconomiesneedcompanyandgovernmentaction.Companyabundantandlow-costenergytoenablegrowthandnationalenergytransitionplansareneededandmeetdevelopmentgoals.Simultaneously,tocapturethebenefitsofmanagingenergytheworldistargetingsupplydecarbonization.consumptionwhileintegratingsupply-sideactions.ActingondemandandsupplysimultaneouslyBusinessesacrosstheenergydemandandisthebestwaytoachievethesechanges.supplyspectrumwillneedtoworktogetherwithgovernmenttodeveloptheseplansandincreaseActingonenergyconsumptionisdoable,awarenessoftheroutesandresultsavailabletoaffordableandprofitable.Thisresearchshowsaddressbarrierstoaction.thatallcompaniesandcountriescanuseexistingleverstoreduceenergyintensity.Acrossbuildings,Developingtheseplansistheessentialnextstepindustryandtransport(BIT),InternationalBusinessinraisingawarenessandgettingbehindactionCouncil(IBC)examplesillustratethattheseactions,onenergydemand.AtCOP28,over120countrieswheresupportedbyappropriatepublicpolicy,pledgedtodoublethepaceofenergyefficiencycanenabletheworldtoreduceitsenergyneedsimprovement.TheIBCcanbealeadingprivatebyapproximatelyathirdwhilefreeingfurthersectorgrouptosupportcountriesintheirambition.TransformingEnergyDemand41WhytransformingenergydemandmattersActionsonenergydemandcanreduceenergyconsumptionbyupto31%,savingupto$2trillionperannum.Whatifabusinesscouldreduceitsannualonreducinggreenhousegas(GHG)emissionsoperatingcostsby10%withinthreeyears?anddeliveringgreaterresilienceinoperations.Whatwouldbetheimplicationsforacompany’sstockpriceifitcouldincreasemarginsonaThesearenottrickquestions,butarebasedonrealsustainedbasisby200-300basispoints?AllwhileexamplesfromIBCmembers.Theanswerliesatsimultaneouslybuildingbothmeasurableprogresstherootofthisstudy:transformingenergydemand.FIGURE1TheenergytriangleSustainabilityandclimatechangeEnablers:Policy,finance,collaborationtechnology,digitalizationandworkforceGeopoliticsEnergyTimeframetransitionSupplyDeliveryDemandRenewableTransmissionIndustryUrbanandNuclearPipelinesbuildingsFossilfuelsInfrastructureTransportJustandEnergyaffordabilitysecurityandresilienceEconomiesSource:WorldEconomicForum,FosteringEffectiveEnergyTransition,2023.Note:Thetrianglerepresentstheenergytrilemma–theimperativeofdeliveringajustenergytransitionwhileensuringaffordability,securityandsustainability.TransformingEnergyDemand5Todate,thereTheproblemapproximately60%ofcurrentdemand.ThesehasbeentoomarketsneedaclearrangeofroutestoeconomicheavyarelianceTheenergytransitioncreatesimmenseandgrowinggrowth,whichincludeabundantaccesstoaffordableongovernmentstensionsbetweentheimperativesofsecurity,cleanenergy.3Ifthefuturelevelofenergydemandisandtheenergyaffordabilityandsustainability(seeFigure1).notmetbyadequatesupply,itcouldleadtohigherindustry,notthepricesandobstaclestogrowthandcompetitiveness.widereconomy,toSecuritydelivernetzero.SustainabilityOnenergysecurity,thefirstchallengeistosimultaneouslymaintainasecureandstableThethirdchallenge,sustainability,istomeetthissupplyofenergyamidanincreasinglyvolatilegrowthinenergydemandinawaythatkeepsthegeopoliticalsituation,allwhiletransformingtoday’sworldontracktomeetthe2050ParisAgreement.hydrocarbon-dominatedsupply.In2021-22,EuropeEvenwithanassumedthree-foldgrowthingrappledwithenergyshortagesandpricesthatrenewableenergy,scenariosforecastasignificanthavethreatenedtheindustrialbaseandforcedshortfallincleanenergysupplyby2050(seeFiguregovernmentstoprocuretheiroilandgasfromthe3),whichcouldbemetwithmorefossilfuel-basedflowsnormallydestinedtootheremergingmarketsenergy.Thisisas,ifnotmore,trueinEMDE,duetoanddevelopingeconomies(EMDE),1whichinthelackofadequaterenewablesupplychains.turnhadtoresorttohighercoalconsumptionandoverallfacehigherenergyprices.Todate,themajorityofdebateandactionhasbeenfocusedongovernmentsandenergycompaniesAffordabilitydrivingchangesinenergysupply.Thishasresultedinremarkablechangesintheenergysystem,withThesecondchallenge,affordability,istoensurerapidincreasesinemissions-freeanddecentralisedthatenergyiseconomicnotjustforbusinesseselectricitygeneration.However,thetrajectoryofbutforsocietyingeneral.Whileforecastsdifferontheenergytransitionremainsoff-trackcomparedthelevelofenergydemandin2050(seeFigure2),toclimateanddevelopmentgoals,hinderedbytheexpecteddoublingofglobalgrossdomesticissuessuchasslowpermittingandpooraccesstoproduct(GDP)andtheadditionoftwobillionpeoplefinance.Therefore,whileactiononenergysupplywillintensifypressureonenergysupplysystems,2remainscrucial,itwillbedifficultforittobetheparticularlyinEMDE,whichareresponsibleforansweralone.FIGURE2Forecastdemandgrowthto2050Percentagegrowthintotalenergyconsumptionacrossdifferingglobalscenarios(sample)%,baseyearto205033%21%14%14%9%8%8%-3%-22%ShellXOM“GlobalSchneiderTotalEnergiesEquinorBP“NewIEA“STEPS”IEA“APS”IEA“Net“Archipelago”outlook”(baseElectric“New“Momentum”“Walls”(basemomentum”(baseyear(base2022)Zero”(baseNormal”(base(baseyear2022)year2022)(baseyearyear2021)(baseyearyear2020)2019)year2018)2021)2019)CurrentpoliciesFurtheractionSources:InternationalEnergyAgency(IEA),NetZeroRoadmap:AGlobalPathwaytoKeepthe1.5CGoalinReach,2023;Shell,TheEnergySecurityScenarios,2019;ExxonMobil,ExxonMobilGlobalOutlook,2023;SchneiderElectric,Backto2050:1.5°Cismorefeasiblethanwethink,2021;Equinor,2023EnergyPerspectives,2023;bp,bpEnergyOutlook2023Edition,2023;IEA,WorldEnergyOutlook2023,2023;TotalEnergies,TotalEnergiesEnergyOutlook2022,2022.TransformingEnergyDemand6FIGURE3ShortfallinrenewableenergysupplyvsdemandfromcommercialsourcesGlobalcommercialtotalfinalconsumptionandrenewableenergysupplyandIEAstatedpolicies(STEPS)scenario,exajoules(EJ),2022-205075%42%SupplyshortfallSupplyshortfall3043922277520502022CommercialenergydemandRenewableenergysupplyAllenergydemandfromcommercialbuildings,industryandtransport,excludingresidentialbuildingsandroadtransport.Sources:IEA,WorldEnergyOutlook2023,2023.Thesolution:actiononenergyconsumptionalongsidesupplyItis,therefore,vitaltoaddressenergydemandusinglessenergytocreatethesame(orgreater)alongsidesupply,reducingtheenergyintensityofoutput.Thisinturnwillreduceemissionsintensitycurrentactivityandfuturegrowth.Demand-side(thevolumeofemissionscreatedinmanufacturingactionisanareawherethebusinessandsocialaproductorprovidingaservice)duetoenergy-casesfordemand-sideactionoverlapclosely.Suchrelatedemissionsbeingreduced.Measurestoactioncanincreaseproductivity,whileunlockingtackleenergyconsumptionarealsobeneficialaccesstoenergyandeconomicgrowth.Thisisdoneacrossallmarkets,asdeliveringhigheroutputwithbyreallocatingpreviouslywastedorunnecessarily-lowerenergyuseisauniversalgood.However,usedenergytonewconsumersand/ornewuses.benefitswillvaryinimportancebetweenmarkets.Afterall,thecheapestformofenergyisenergythatForexample,indevelopedeconomies,lowerisnotused.There’salsoaclearopportunitycost–energyintensityhelpstoenhancecompetitivenessanydelayinactionwillforceincreasedenergythroughlowertotalenergycostwhileattenuatingspendingandcontinuedmissingofclimategoals.environmentalrisks.InEMDE,takingactiontomanageenergydemandaswellasfocusingonThegreatnewsisthattransformingenergydemandthesupplycanimproveaccesstosecureenergy,isdoableandaffordablenow.Allcompanies,improvingtheabilitytoattractinvestmentwhileregardlessofsector,cantapintoexisting,affordableofferingtheopportunitytoavoidlow-efficiencytechnologiestoreduceenergyintensity–thatis,legacysystemsseenindevelopedeconomies.TransformingEnergyDemand7SizeoftheenergydemandprizeThisstudybreaksglobalenergydemandintoacrosstheseareasthatwouldreduceoverall“BITs”–buildings,industryandtransport.Together,energyintensitybyaround31%relativetocurrenttheseaccountfor94%ofglobaldemand.4levels(seeFigure4),withfurther,harder-to-deliverAchievable5interventionshavebeenidentifiedinterventionsincreasingthisto42%(seeFigure6).FIGURE4Short-termreductionpotentialofenergydemandactions(achievablescenarioonly)1Potentialenergyintensity22022globalenergy3Potentialenergyintensityreductionreductionbyvertical(achievable)demandbyverticalforthewholeeconomy(achievable)38%442EJ31%6%4%OtherOther26%5%TransportTransport29%21%30%12%BuildingsBuildings38%11%IndustryIndustryIndustryBuildingsTransport2022demand–In(1),individualinterventionsbyverticalareidentified(e.g.installingmoreefficientelectricmotors),andtheirpotentialimpactonvertical-wideenergyintensityissummed.–Togaintheoverallimpactofthesechangesonglobaldemand,thesearethenscaledbytheproportionofenergydemandthateachverticalrepresents(2).Inaddition,anaverageintensityreductionisappliedtosectorsnotconsideredindepth(definedas“other”)–Thisresultsin(3),thepotentialcombinedimpactofindividualinterventionsonglobalenergyintensity.Achievableisdefinedasinterventionsthatarecurrentlytechnologicallyavailableatscalewithassociateddataavailableontheirenergyintensityimpact;Percentagedoesnottotal31%duetorounding.Sources:IEA,WorldEnergyOutlook2023,2023.TounderstandhowtheseinterventionswouldaffectThiswasachievedbyfirstmodellingenergytheworldovertime,thisreportconsiderswhatdemandin2030ifnoenergyintensityimprovementwouldoccuriftheseinterventionsweregloballyweremadebetween2022and2030(“noefficiency”enactedby2030(seeAppendix,A1:Methodology).scenario,seeFigure5).TransformingEnergyDemand8FIGURE5Forecastof“noefficiency”scenario,2030EJ,2022-2030,global+30%1315744422022energyconsumptionImpactofmakingnoenergyefficiencyprogress2030“noefficiency”scenario2022energydemand:Totalenergyconsumed,2022Impactofmakingnoenergyefficiencyprogress2030“noefficiency”scenario:Forecast2030energydemandifnofurtherefficiencygainsaremadeSource:IEA,WorldEnergyOutlook2023,2023.Ifappliedtothe“noefficiency”scenarioin2030,theseareaheadofthetargetsetbytheSustainableinterventionswouldallowoutputtobemaintainedwithDevelopmentGoals(SDGs),theInternationalEnergylessenergy,resultinginareductioninenergyintensityAgency(IEA)andtheInternationalRenewableEnergyaround19%belowthelevelsforecastifcurrentAgency(IRENA)ofdoublingthecurrentratetooverpoliciesareenacted(seeFigure6).Onanannual4%toreachnetzero.Asaresult,ifdelivered,thesebasis,thiswouldcorrespondtoanimprovementinterventionswouldputtheworldaheadoftheinenergyintensityof4.6%perannum.SuchgainstargetsintheParisAgreements.FIGURE6Impactofproposedinterventionsonglobalenergydemand,20306EJ,2030,globalImpactofachievable-31%-42%interventionsvs“noefficiency”-19%574Impactofambition482interventionsvs406“noefficiency”393331“Noefficiency”2023“current2030net-zero2030achievable2030ambitionscenariopolicies”scenarioscenarioenergydemandenergydemandForecastenergydemandin2030ifhistoricalrateofenergyefficiencyimprovementismaintainedNetzeroscenarioforecastin2030Forecastenergydemandifallachievableandallambitioninterventionsareputinplaceby2030Forecastenergydemandifallachievableinterventionsareputinplaceby2030Achievable”scenariorepresentsdifficultstepstoimplementthatwillreduceenergyintensity,butthatarebasedontechnologiesthatareavailableatscaletoday,makingthemtechnicallyachievable.“Ambition”scenariorepresentstheimpactofallachievableinterventionsalongsidesomelessproven,moredifficulttoscaleinterventions.Source:IEA,WorldEnergyOutlook2023,2023.TransformingEnergyDemand9Evenwiththeenergynumbersbeingsocompelling,cumulativecostofenergyefficiencyinterventionstheseinterventionswouldhavetobeaffordable.by2030toreachnetzeroat$14trillion,7thisAgain,actingonenergydemandoffersgoodnews,studysuggeststhat,ofthis,upto$8trillionissuggestingaclearrangeofrouteswhichcomerepaidduringtheperiod,withfurtherannualatafractionofthelong-termcapitalexpendituresavingsofupto$2trillionperannumatcurrentneededtoswitchenergysupplyawayfromprices,dependingonhowenergypricingvariesinfossilfuel.WhilearecentreportbyIRENAputstheresponsetointensityreduction(seeFigure7).FIGURE7Impactofenergydemand-sideleversonglobalenergydemandandillustrativeassociatedcostimpacts,2022-30GlobalenergydemandforecastscenariosandassociatedcostreductionsEJ,global490Currentpoliciesscenario2480$0.9trillionadditionalspend119%470andapproximately3,000Combined$2trillionsavingsvsforecastadditionalpowerstationsifspendundercurrentpolicies460currentpoliciesareenactedwithnofurtheractionondemand4504402022demandGlobalenergyconsumption(EJ)430420$1.1trillioninenergysavings1comparedto4102022demand400390Achievableenergydemand380370360$2.5trillioninenergysavings1comparedto2022demand350340330Ambitionenergydemand10203002022Notes:1Assumescurrentaveragepriceperjouletostayconstant.Thisisillustrativeandtoquantifythetheoreticalsizeoftheprizebasedoncurrentspending.Actualfigurewouldvarydependingonresponseofenergypricestoreductionindemand,andchangesinoverallenergysystemsandtheirfuelmixes.;2IEASTEPSscenarioSource:IEASTEPSscenarioWhilesupply-sideinterventionsremaincrucial,Indevelopingtheseconclusions,aglobalsurveyinterventionsonenergyconsumptionarewasconducted,whichinvolvedcontributionsfromeffectivelyself-fundingduringtheperiod,canbethe120membersoftheWorldEconomicForum’spaidbackwithinthedecadeandembedlong-termInternationalBusinessCouncil(IBC),agroupofefficiency–allwhileshiftingtheworld’sabilitytomultinationalcompaniesrepresentingabout3%ofdelivertheParisAgreement.globalenergydemandfromtheirdirectoperations.ThesurveyaimedtounderstandthecurrentrolethatTohelporganizationspursuethisprize,thisreportcompaniesareplayingintheenergytransition,whatidentifiestheopportunitiesandthebarrierstoispreventingfurtheractionandhowtheseissuescanadoption,highlightingtheleversthatwillhelpbeovercome.Inaddition,memberinterviewswerecompaniesreduceintensity,anddevelopingconductedtoidentifyexamplesofreplicableenergysuggestedroutestofollowtodeliverthesechanges.consumption-focusedmeasures.TheresultsoftheseMostoftheseinterventionscanbedeployednow,interactionsarecapturesintherecommendationsdrivingsignificantimprovementsinlessthanayear.throughouttheremainderofthisreport.TransformingEnergyDemand10userid:572586,docid:151317,date:2024-01-12,sgpjbg.com2ThethreeenergydemandleversTherearethreeexisting,deliverableleverstoreduceenergyintensity,butthesefacechallengesthatlimituptake.FIGURE8ThreeleversenergydemandleversLeverDescriptionMedianenergyCasestudyintensityimpact–AI-drivensoftwaretocontrolexistingLowerEnergyInterventionstosaveenergybyAroundHVACsystemscomplexity/savingchangingacompany’songoingcorebehavioursandactivities,10%–ReducesHVACenergyintensitybyshorterprimarilyOpExfundedwith20-25%,paybackoflessthan1yearpaybackshort-termpayback1UsinglessenergytoperformAround–Retrofittingbuildingsusingsmartthesametask,typicallyfundedproducts,lighting,improvedHVACbyCapExwithmedium-term30%Energy–Reducedenergyrequiredfornon-industrialsectoroperationsby27%efficiency12paybackbyinvestingincore–Paybacklessthan15years2businessprocesses3ValuechainScalable,replicablepartnershipsAround–SwedishsulphuricacidplantcollaborationwithadjacentsupplychainstosupplyingenergytourbandistrictHigherachieveenergyandemissions45%heatingcomplexity/intensityimprovementsthroughdemandsubstitution,demand–Reducedcity’sheatingenergylongerconsolidationandflexibleintensityby25%paybackdemandresponse–Lessthan1-yearpaybackNote:Impactdefinedaspercentagedecreaseinenergyintensityofagivenprocess–e.g.fittingLEDlightscanreduceenergyintensityoflightingdemandby75%–notthepercentagedecreaseinacompany’soverallenergyintensity1Whileenergyefficiencyisawidelyusedandunderstoodterm,hereitisdefinedinthesenseofaparticularinterventiontype(i.e.CapEx-ledwaystouselessenergytoperformthesametask).Itthereforeisdifferentfrom“energyintensity”andcommonuseof“energyefficiency”inthiscontext.2ThisexampleisfromAramco’sLeadbyExampleprogramme.Seeonlinecasestudies:https://initiatives.weforum.org/energy-and-industry-transition-intelligence/transforming-energy-demandLevers1and2offerimmediatevalue.Savingsandleverswithacultureofcontinuousimprovement.efficiencyinterventionscandeliverareductioninWhileeachindividualactionmaybesmall,theycanprocessintensityofupto90%withnoneedtocompoundtodrivemajorchangesinintensityoverreplacechangeswithinnovationintechnology,time(seecasestudy1).regulationorexternalfunding.Electrificationisakeyvectorforthis,oftendrivinglowerenergyintensityThethirdlever,collaboration,showshowcompaniesinexistingprocessespurelythroughinherentlowercancreatenewvaluepoolsandrevenuestreamslevelsofwastagecomparedtocombustion-basedbycollaboratingwithadjacentsupplychainsandalternatives.Progresscanbedrivenevenfurtherthepublicsector.Thismustbedoneinconcertthroughafocusonrepeatedapplicationofthesewithenergysuppliersandwithalong-termviewtoTransformingEnergyDemand11ensurefuture-proofchange.Ratherthanwaitingforandgrid“wheeling”tocreateutility-scalesolartheenergysupply-sidetofixitself,companiesfromfarms.Withlocalbanksupportandminingfirmallsectorscanbecomeactiveparticipantsintheguarantees,theyachievedrapidgrid-scalepowerenergytransition.deploymentin18months,fasterthanseeninmostothercountriesandasignificantachievementgivenAnexampleofthisleverisenergydemandthecountry’sunstablecoal-basedenergysupply.consolidation–wherecompaniesand/orotherpartiescollaborate(e.g.inanindustrialcluster)toCollaborationcanalsoenableflexibledemanddrivechangesinenergyintensity,suchasthroughresponse–wherecompaniescollaboratewiththeirdistrictheating(seeFigure8),orlonger-termpowerproviderandgovernmenttoadaptoperationsthroughthedesignofcircularbusinessmodels.basedondemandandpricesignals.ThisincludesBusinessescanalsocollaboratetoachievesupplyreducingoperationsatpeaktimesandinstallingsubstitution–usingtheirenergydemand,inenergygenerationorbatterystoragetoenableflexibleconcertwithfinanciers,energycompaniesandenergyusage.Whiledemandresponsepredominantlygovernment,tochangetheirenergyandemissionsimprovesemissionsintensity(asfossilfuelsareintensity.InSouthAfrica,AfricanRainbowMineralscommonlyusedattimesofhighdemand),itcanandotherminingcompaniespartneredwithalsoimprovethegrid’sefficiencyandeffectiveness.8renewabledevelopers,usingofftakecontractsThechallenges:growingawarenessanddevelopinganenablingpolicyenvironment42%ofboardsdiscussWhiletheeconomicandbusinesscaseisclear,bymanydifferentactorswithinanorganization.therearethreesignificantbarriers:Sincemostinterventions–changinglightenergyintensityvsbulbsinonelocation,installingnewmotors82%forcarbon1.Lowawarenessinanother–aresmall,itishardtogetpeopleintensityThroughtheinterviews,anotablelackofexcitedaboutthem,andevenhardertotakeawarenesswasidentifiedamongbusinessescontrolanddeliverchange.Manycompaniesabouthowtochangetheirenergyuse,particularlylackasinglepersonordepartmentresponsibleoutsideenergy-intenseindustries.Thisfocusesforenergycosts,withthesurveyfinding29%ofonaninabilitytobuildandexecutemeasurescompanieshavingnosingledepartmentowner.toaddressenergyconsumption,andalackofclarityontheimpacttheseinterventionscanhave2.Difficultyinachievingappropriatepaybackbothontheirenergybill,thetransitionandwiderOfsurveyedmembers,38%saidthatsolutionsresilience.Energyuseissimultaneouslynotaforreducingenergy/emissionsintensityofferedtopstrategicpriorityandadifficultnumbertoinsufficientlyattractivereturns.Theissuesstemgetafirmhandleon:while82%ofcompaniesfromextendedpaybackperiods.Totakeonediscussemissionsintensityattheboardlevel,example,buildingretrofits,whichcanbeveryonly42%ofcompaniesdosoforenergyintensity.valuable,paybackinlessthan8years,whereasbusinessestypicallyhaveplanningcyclesof3-5Discussionswithbusinessleadersreflectayears.Developingfinancingfrombusinessesorperceptionthattheenergysystemisoutsidetheirfinanciersthatisdesignedaroundthesavingscontrolandistheresponsibilityofgovernmentsfromenergyintensityreductionsandtheirandtheenergysectortosolve.Intotal,94%ofassociatedlongerreturnsperiod,ratherthansurveyedIBCorganizationssaidtheyhadagoodrevenuegrowth.understandingoftheirownenergyusebutonly53%understoodtheenergyuseoftheirsupply3.Lackofsupportivepolicyenvironmentchains–whereenergyconsumptionisoftenaBusinessesrepeatedlyhighlightedthebarriersfarlargerpartofthecompany’sextendedenergythatpolicyandregulationposetofurtheractionandclimateimpact.Thiscanbedrivenbyalackonenergyintensity,amongthem:alackofoftech-enabledmonitoringandreporting,aswellsupportiveregulation(47%ofrespondents),aslimitedpartnershipsanddatasharingwithinclarity(47%)andinsufficientincentives(38%).supplychains.Toaddressthesechallenges,governmentsneedtodeveloppoliciesandregulationsthatEnergyuseiswidelydispersed–thesumofacreateincentivesfor,andalignmenton,reducinghugenumberofdifferentactivities,managedenergyandemissionsintensity.TransformingEnergyDemand123Businesssolutions–overallapproachAllbusinessescantakethreestepstoreducetheirenergyintensityfortheirdirectandindirectoperations.1.Assessenergyuseacrossthebuildings,geographiccontext,withbusinessesinEMDEindustryandtransport(BITs)portfolio:andfast-growingmarketsmorelikelytofocusBreakdownuseacrossBITs,bothdirectlywithinonmeasurestominimizetheenergyintensitythecompanyandinitsvaluechain.Businessesofgrowth,ratherthanretrofittingtoimprovecanthenconsiderthespecificinterventionscurrentoperations.setoutinthechapter4(alongsidemethodsusedinthecasestudiesinthisdocumentand2.Understandcompany’sroleintheenergyonline)toidentifyleversforchange.Thesesystem:Thesecondstepforeverycompanywillvarybyindustry.Forexample,financialistoidentifyitsroleintheenergysystemcompaniescanprovideinnovativefinancing(seeFigure9).Whileopportunitiesexistforsolutionstoenergyintensityimprovementmeaningfulimpactacrossallenergysystemprojects.Productmanufacturerscanfindwaysroles,positioningdeterminesthecurrentleveltoreducelifetimeproductenergyconsumption.offocusandtheappropriateandmostimpactfulItisnecessarytotailorthesesolutionsbasedonactionsthatthebusinesscantake.FIGURE9EnergysystemrolesArchetypesEnergySupplierHighLowEnablersupplieranduserenergyuserenergyuserDescriptionProviderofenergytoCompaniesthatCompanywithCompaniesthatareCompaniesthatotherbusinessesbothsupplyenergy,energyintensiveneithersuppliers,canenabletheCurrentenergyactivity;considersnoruselargeenergyreductionawarenessanduselargeenergycostsinamountsofenergyofotherfirmsamountofenergyinoperationsPotentialenergyoperationstransitionroleHHMHLMRenewableenergyWorkacrossvalueReductioninenergyFocusondemandProvisionofsupplier,workwithchaintoenableuse,sharebestconsolidationtechnology,financeenergytransitionorotherassistance,customersonpracticewithothersintensityreductione.g.consultingHighestSavingsimpactEfficiencydemandCollaborationleversExampleEnergycompaniesOilandgasSteelFast-movingProfessionalandindustriesEnergygeneratorsChemicalsconsumergoodsfinancialservicesConcreteRetailClimateandmeasurementMiningtechnologiesConsumertechnologyDemandresponseTransformingEnergyDemand133.Instituteaprogrammeofchangealldepartments,aswellasincorporatingcostsintoFinally,businessesshouldconsiderhowtomarketmechanisms.Theseplansshouldinterrelateeffectivelyexecutechangebasedaroundanbetweenpublicandprivatelevels,withmultipleenergytransitionplan.Suchplansdesignedbypathstoachievetheoverallgoaldependingbothgovernmentsandbusinessescanaimtooncontext.Theseshouldbedistinctfrom,butdoubleenergyefficiency–identifyingandcapturingintegratedinto,widernet-zerotransitionplans.demand-sidebenefits,andtotriplerenewablecapacity–integratingactionsalongsidetheBasedoncasestudiesfrombusinessesaffiliatedsupplysideby2030.DetailedactionsforeachwiththeForum,fiveareashavebeenidentifiedkeysectoroftheeconomyshouldbeintegrated,tofocusontocreateasystematizedapproachlinkingtargetsandimplementationroadmapstodevelopingandexecutingtheseplans(seeacrossnationalandlocallevelsofgovernmentinFigure10).FIGURE10ExecutionapproachStrategizeCentralizeFinanceCollaborateMeasure–Developanenergy–Createacentralized–Determinefunding–Approachgovernment–Builddigitalongoingtransitionplanacrossteamwithanmechanismsandsupplychainmeasurementofimpactdirectandindirectenergyenergy-intensityparticipantsearlyandbenchmarkmandateandfunding–Identifyfinanciersearlyinternally/withpeers–Usingaccurate,digitizedwhoarewillingto–Usethistomeasurement–Thismaytakethecollaborateoncomplexbuildsupporting–Linkthistoformofachiefdemandfinancinginfrastructureexecutiveand–Includeoverarchingenergyofficerforchangecentralizedteamdemandtargetslinkedreportingtothe–Promotesolutionsincentivestoglobalgoals(e.g.chiefexecutivethatsharesavings–Identifycustomersdoublingtherateofofficer/chieffrominterventionsandsuppliersthat–Collaborateenergyefficiencyfinanceofficercanunderwritecross-companytoimprovement)interventions(e.g.expandcoverageofviaofftakecontracts)measurementto–Createbusinesscasesadjacentsupplychains,foractiontoprioritize–Engagestaffforenablingwiderchangeideasandthenupskills–Alignambition,topowerdeliveryaccountabilityandincentivesatallorganizationlevelsConcretegovernancepracticesarekeytodriveresponsiblefordrivingthesechangescanactaschange,particularlyforactionsinadjacentsupplyafocalpointtoidentifythecapability,fundingandchains.Becausetheimpactofthesemeasuresgovernancechangesneededinordertodrivecanbehardertomeasure,changingmindsetsandwidespreadchange.Thisapproachhasparticularlyaligninggovernancestructuresandincentivescanhighpotentialgiventhebarriersaroundawarenesshelptoensurethesewideractionsthatwillbenefitandthedispersedsolutionset,thoughcurrentbusinesseslongterm.Havingachiefenergyofficeruptakeislow.TransformingEnergyDemand144Businesssolutions–selectedinterventionsforchangeinbuildings,industryandtransportInterventionsforchangeareavailableacrossallsectorsbutrequireconcertedprivate-publiccollaborationtoovercomeuptakebarriers.Interventionshavebeenprioritizedbytheireconomicandsupplychainsthatwillmaketechnically-sectorwithinBITandbytheirimpactontotalachievablechangesonenergydemanddeliverable.globalenergyuse.Combined,theseillustrateThesecollaborationscancatalyseactioninareaspossibleroutesavailableforchangeandmethodsthatwouldbeinsolubleforanystakeholderalone.toovercomebarrierstoaction.Thefocusisoncurrently-availableinterventions,whileacknowledgingFurtherupsidescanberealizedthroughfuturetechnologicalimprovementsandremovinglegacytechnologicaldevelopments,especiallyinartificialsystemswillbeneededlonger-term.Deliveringintelligence(AI)thatoffersmyriadopportunitieschangewillrequirecollaborationsbetweenallprivatetoreduceenergyintensityacrossallverticals,asandpublicstakeholderstoalignavailableinfrastructureoutlinedbelow.BOX1AIandenergyintensity–exampleAIcomesinmanyformsandiscontinuingtoroute,usingAItoplanthisbasedoncurrenttrafficdevelop.Crucially,however,certainmodalitiesareconditions,topographyandspeedlimits.Thisisalreadyavailabletodaythatworkatscale,deliveringestimatedtohaveavoidedmorethan2.4millionprofitablechangestoenergyintensityforcompaniestonnesofCO2equivalent(MtCO2e)ofemissionsandconsumers.ThiscurrentlyfocusesonenergysinceOctober2021,whilesavingthecorrespondingsavings–OpEx-basedoptimizationofexistingamountofenergywithnolossinoutput.processesinordertoreduceenergyconsumption.SimilartechnologycanbeappliedatacompanyThisistypicallydonethroughtheuseofreal-timelevelforfleetroutingmanagementtoreducedatatobetterpredictenvironmentalconditionsandoverallfuelcostsandenergyintensitywhilethentochangesystemsinresponse.Googlehasmaintainingsuccessfulroutinganddelivery.Formultipleexamplesofthisintransportalone.Forfurtherinformationonthisandthewiderimpactexample,GoogleMapsnowincludesanoptioninofAIontheenergytransition,seethereportseveralcountriestoselectthemostfuel-efficientAcceleratingClimateActionwithAI.TransformingEnergyDemand15FIGURE11CoverageofindustryverticalsandsectorswithinthisreportGlobaltotalfinalconsumptionbyindustryverticalandsector(EJ,2022)VerticalSectorIncreasingcoveragedetailIllustrative442442examples6%6%InterventionareasElectricvehicles25%2%Other2%OthertransportTransportMarine2%AviationFreight18%RoadPassengerBuildings1%Otherbuildings9%CommercialEnd-of-life31%ExisitingbuildingsRetrofittingNewbuildings21%ResidentialIndustryLightindustry13%Otherindustry38%4%CementExtractiveIronandsteelBysector5%ChemicalsChemicals8%SteelandironIronandsteelMiningand8%extractiveExcludedBysub-sectorIncludedTheseexamplesrepresentthosethatarecoveredinmoredetaillaterinthereport.Theydonotcoverallattractiveexampleinterventions-e.g.inTransport,inadditiontoelectricvehicles,thereareclearopportunitiestoreduceenergyintensitybymovingtohigherefficiencycombustionenginevehiclesSource:IEA,WorldEnergyOutlook2023,2023.4.1IndustryTheopportunityIndustryisdefined,inthisreport,astheverticalInterventionshavebeenidentifiedthatcanreduceencompassingtheproductionofcommercialenergyintensityofindividualindustrialprocessesbyproducts,including“heavy”industry(steel,cement,upto90%(e.g.introducinghigh-efficiencyelectricchemicals,aluminium,extractive)andlightindustry(allmotors).Ifimplementedwidely,thesecoulddriveothers).Thissectoraccountsforaround38%ofglobalareductionoftheverticalenergyintensityof29%energydemandand21%ofGHGemissions.9Tocomparedtocurrentlevels,reducingoverallglobalillustratetherelativeenergyconsumption,examplesenergydemandby11%.Thisrequiresactionfromfromchemicals,extractiveindustries,foodandallcompanies,asallhaveindustrialcomponentstobeverage,andpharmaceuticalsareprovided,alongtheirvaluechains.withamoredetailedexampleforsteelmanufacturing.TransformingEnergyDemand16FIGURE12EnergyimpactofindividualinterventionsinindustryVarioustimeperiods,geographies95%90%85%80%75%70%65%62%Collaboration60%55%50%45%40%35%30%28%Efficiency25%20%15%17%10%5%0%SavingsNote:Datarepresentstheimpactofindividualinterventionsonasubsetofenergyuse(e.g.theimpactofstafftrainingonmachineenergyintensity),nottheimpactonindustrialenergydemandorglobalenergydemandasawhole.Bluedatapointsrepresentthemedianimpactofindividualinterventions.DatapointsusedcomefromacombinationofIBCmembercasestudiesandwiderresearch.TransformingEnergyDemand17FIGURE13DemandinterventionsinindustryDemandinterventionsinindustry1Energysaving2Energyefficiency3Valuechaincollaboration–Intelligentprocessdesign,e.g.using–SwitchingmotorstoelectricandAItooptimizefactorylinedesignMEPSforelectricmotors–Recyclinginputsformanufacturing–Sourcinggreenrawmaterials–Stafftrainingandawarenessraisingto–Upgradeheating,ventilationand–Demandconsolidationtopurchasecleanreducewastedmaterialsandenergyairconditioning(HVAC)equipmentconsumptionenergyandrenewablefuels–Electrificationofheatsourcesfor–Industrialclusteringcross-industrytoshare–Captureandreusemanufacturingwastelowheatprocesses(lessthan180withinproductionlinesdegreescentigrade)infrastructureandenergyintensityinitiatives–Business-to-businesspartnershipstoimprove–Useofcombinedheatandpowersystems(CHPs)productenergyintensityduringitsuse–Energyhubenablementandintegrated–Heatrecoveryandreuse–Useofpowerfactorcorrectionsystemsenergysolutionsinlowpowerfactormachinery,suchasmotors,heatingsystemsandlighting–LEDlightingThesesectorsareoftentermed“hardtoabate”Longerterm,thereareopportunitiestodrivetheduetotheirhighenergyuseandintroductionofdevelopmentofmoreenergy-efficientproductsnew,efficienttechnologies,suchasdirectreducedthroughinnovation.Anexampleisapartnershipiron(DRI)steel,effectivelyrequiringaknock-downbetweenachemicalcompanyandanenvironmentalandrebuild.Inthiscontext,thecostofenergyservicescompanythatinitiatedadesigntofacilitatedemand-sideinterventionscanbeprohibitivefortherecyclingofelectricvehicle(EV)batterymetalsindustriesamortizinginstalledcapacityover25-40inEurope,thussecuringalocalsupplysourceforyears.Importantly,thefirsttwolevers–savingscriticalmaterials.Additionally,theimpactofAIisandefficiency–coulddeliversignificantreductionlikelytocontinuetogrow,withexistingusecasesinenergyconsumptionnowwithoutafullrebuild.includingitsdeploymenttoallowforpredictiveToomanypublicpolicyinitiativesfocuson“bigmaintenanceofindustrialmachinery.Thiscanticket”transformativechangesoverlookingthese,increaseuptime,removeunnecessaryscheduledstillimpressive,potentialgains.Thislower-hanginginterventionsandextendmachinerylifetime.fruitshouldbeasimportantafocusforplayersandpolicy-makersasthedreamofafullymoderninfrastructureifParisgoalsaretoberealistic.Industryexamples29%potentialreduction1.Heavyindustrytoa15%costreduction.However,considerationofensuringajustenergytransitionmustbegivenhere,inindustryenergyMiningandextractivewithcaregiventothehumanimpactofautomation.intensityExtractiveindustries(mining,oilandgas)constitutearound8%ofglobalenergyuse.Withinoilandgas,whereprocessesaretypicallyasset-heavy,energyefficiencyisalsothemajorWithinmining,approximately93%ofenergyisleverforchange.Forexample,improvementsusedforextraction,intra-minemovementandindrillingtechnologycanimproveoveralldrillingcrushing,allofwhichareequipmentfocused.Majortimeandproductionrates:amajoroilandgasinterventions,therefore,focusonenergyefficiency–companycollaboratedwithanoilandgasservicespecificallydigitaloptimizationofplantoperations,companytodeployaclosed-loopautomatedandautomationandelectrificationoftransport.Anwireddrillstring,whichprovidedreal-timedrillingautomatedtrucknetworkhasthepotentialtosavedata.Thisinnovationresultedinan82%reduction15-20%oftransportenergydemand,throughtheintheoveralldrillingtimeperwell.Byleveragingoptimizationofrouting,uptimeandthrottleinput.real-timedata,theywereabletoextractmoreOnaper-truckbasisin2018,amulti-nationalhydrocarbonsinagivenarea,therebyincreasingminingcompany’sautonomoustrucksoperatedoverallproductionwhilereducingtheenergy700hoursmorethanhuman-driventrucksandledintensityoftheoperation.10TransformingEnergyDemand18ChemicalsFacingsignificantmarginpressureduetotheThechemicalssectorconstitutesapproximatelyglobalenergycrisis,anAmericanpharmaceuticals10%ofglobalenergydemandandiscrucialtothecompany13installedacombinedheatandpowerenergytransitionduetoitsrapidgrowth(around4%plant(CHP)atonesite,usingtheheatgeneratedperannum),11drivenbyneedforitsendproductstodrivemanufacturingprocesses.Thisdrovea(e.g.ammoniaandmethanol).37%reductioninprimaryenergyconsumptionwhilereducingemissions.IfreplicatedacrossFeedstocks,whichaccountforabouthalfofenergythesector,sucheffortscouldreduceenergyuse,areoftendifficulttoreplaceduetotheprecisionconsumptionbyupto20%.ofchemicalsynthesisprocesses.However,insteamcracking,thesinglemostenergy-consumingprocessFoodandbeverages(F&B)inchemicals(about8%ofsectorenergy),12intensityEnergyintensityimprovementinF&Bhaslaggedcanbereducedthroughswitchingtonon-steamhistorically,withfoodmanufacturingachievingcatalyticmethods.Forexample,Dow’sUNIFINITYonlya6%decreasefrom2000-2020.14Foronetechnology,reducesenergyusebyaround20%Americanbeveragecompany,colddrinkequipmentcomparedtoincumbentcatalyticmethodsandcanisthelargestcontributiontotheirsystem’scarbonberetrofittedtoexistingsteamcrackers.footprint.Workingwithbottlersandsuppliers,thecompanycreatedamachineconsuming10%2.Lightindustrylessenergyoverallthananaveragemachine.Additionally,itusedpowerforcoolingatnightwhenPharmaceuticalselectricitydemandislower,increasingtheefficiencyInthepharmaceuticalindustry,whichconsumedofgriduseandlimitingtheneedformore-flexibleapproximately$1billionofenergyin2021,thehigheremissionintensityenergysources.primarymodeofdirectenergyconsumptionisheating,ventilationandairconditioning(HVAC)(around65%ofdemand).Collaborationstoovercomebarrierstoaction:CollaborationWhileactionsexistthatcanbetakeninallsectors,todrivechange.Creatingcross-industrygroupsbetweentheyarenotbeingimplementedatscaleduetotosharelearningsandbestpracticesonenergystakeholdersisindustry-specificbarriers.Thesevarybetweenlightintensity–e.g.informationonprocessheatkeytoidentifyingandheavyindustriesduetothedifferinglevelsofinterventionsandanonymousdatabasesonnovelfundingenergyuse(seebelow).Yet,allcanbereducedenergyintensityforbenchmarkingpurposes.Closeandrepaymentthroughcollaborationwithadjacentsupplychains.cooperationbetweenenergyserviceprovidersandmethods.enduserscouldalsocreateenergy-as-a-serviceHigh-levelizedcostsofproductionassociatedmodelswithprovidersactivelyoptimizingendusers’withlowmarginsmaketransformativechangesenergyintensity.complexwithinheavyindustriesandexpensivewithinlightindustriescomparedtotheirratherlowInthelongerterm,technicalbarriersshouldalsoenergyuse.Collaborationbetweenstakeholdersbeaddressedtoreducetheenergyintensityofiskeytoidentifyingnovelfundingandrepaymentenergeticallyandthermallyintenseprocesses.methods,increasingtheattractivenessofequipmentOthersareencouragedtotakesimilarapproachesreplacement,suchasextendedrepaymentperiodstotheonestakenhereinordertodrivethisandsharingbenefits.technicalprogress.LackofsufficientcreditworthinessandcollateralInEMDE,thisverticaliskey,as54%ofsteelandmakeaccesstofinancingcomplexforindustrial58%ofmethanolisproducedinChina,and45%ofsmall-andmedium-sizedenterprises(SMEs).ironoreisminedinChina,India,BrazilandSouthThiscanbeaddressedbybanksandinsuranceAfrica.However,accesstoreliableenergysourcesorcompaniescollaboratingwithSMEstoco-designlackofgridcapacitytosupportverticalelectrificationenergyintensity-orientedgreenfinancialproducts15haveprovedchallenging.Todrivechange,keymatchingriskprofilewithrequiredfunding.industryplayerscanco-formofftakeagreementswithbothdevelopersandgovernmenttoencourageLimitedawarenesstowardsenergyintensityclean-energydevelopment.Industrialsitescolocationmeasures,particularlywithinlightindustries,aggregatingdemandtodevelopmicrogridsolutionsandfragmentedsupplychainslimittheabilitycanalsobeakeyleverinmoreremoteareas.TransformingEnergyDemand19Detailedsector-specificexample:steelenergyintensityTheopportunityMetalmanufacturingisresponsiblefor8%ofglobalhard-to-abatesector,economicallyenergydemandand7%ofglobalemissions.Ironandtechnologicallyviableinterventionsthatareaccountsfor93%ofminedmetalsbytonnage,ofcurrentlyavailablecandeliveranenergyreductionwhich95%isusedinsteelproduction.16,17Inthisofupto22%(seeFigure14).FIGURE14ImpactofinterventionsonsteelsectorenergydemandEnergyintensityimpactofinterventions2022,allgeographies,EJ25135262022demandSavingsEfficiencyCollaborationAchievableenergydemandNote:Widercollaborationstodrivechangearemorechallengingbutcandrivefurtherimpact.Source:IEA,WorldEnergyOutlook2023,2023.EnergydemandinterventionsAlongsidevertical-wideactions(e.g.stafftraining,–ImplementingenergymanagementLEDlighting),steel-specificinterventionscanupgradesystems(EnMS)andoptimizeexistingmachineryacrossalloperators.Thisisdrivenbythediverseagesandtypesof–Switchtocokedryquenchingfromwetmanufacturingtechnologyinuseincurrentsystems:quenching,torecoverheatandreduceenergyintensityEnergysavings:Valuechaincollaboration:–Blastfurnaceenergyandinputoptimization–IncreasetheproportionofscrapmetaluseinEnergyefficiency:electricarcfurnace(EAF)steelproduction–Upgradingoutdatedblastfurnaceswithplug-in–Increasedproportionofsteelproducedcost-effectiveefficiencysolutions,includingbyDRI-EAFwasteheatrecovery,digitaloptimization,furnaceefficiencyupgradesTransformingEnergyDemand20Long-termdevelopmentofimprovedtechnologiessteeltechnologiesbytheFirstMover’sCoalitionshouldalsobepursued.Indeed,asimilarinitiative,whilewider,long-termdemand-sidecollaborativeapproachfocusingondemandsignalsinterventionscanbefoundintheMissionPossiblehasalreadysuccessfullybeendevelopedforfuturePathwaysMakingNetZeroSteelPossiblereport.CollaborationsactionsledbyprivatesectortoovercomebarriersVariabilityofdemand:Enduserscommittingtoexistingplantatend-of-lifeandwillleadtoalow-intensitysteelpurchasingthroughguaranteed95%reductioninemissionsperunitofsteel.contracts.AGermansteelcompany’splannedplantinSwedenwasmadepossiblethroughsupply-Limitedsupplyofscrapmetalbothchainpartnerships,securingconsistentsupplyofinqualityandquantity:Allsectorstakeholderssustainableironore,a2.3terawatt-hour(TWh)e.g.operator,recyclers,togetherwithconstructionperyearpowerpurchaseagreement(PPA)withcompaniesandgovernmentscanprovidekickbackamajorenergycompany,andofftakecontractscontractsforend-usersprovidingsteel,orvolume-withcustomersguaranteeingaround€1.5billionbaseddiscountsonfuturesteelbasedonindemand.Theplanwasinitiatedtoreplaceanscrapsteelrecovered.TransformingEnergyDemand21CASESTUDY1PathtosustainableenergyefficiencyMahindra:India’slargestautomanufacturerbyproductvolumeRegionIndiaTagsSectorIndustryFocusEnergyefficiencyEnergytransitionplanBusinesscaseEnergydiagnosticEnergyintensitytracking&monitoringCasestudybackgroundTaskMahindrahaspubliclypledgedtodoubleenergyproductivityDriveoperationalefficiencyimprovementstosupportgoalsby2030(2009baseline)andtonetzeroby2040Actions1234Deploystrategies:Definegoals:Establishbaseline:IdentifyGaps:A.Small-scaleprojects:B.Largerhigh-impactprojects:–Enhance–Analysed–Assessed–Switchedofflightsenergyexistingenergyareaswherewhennotinuse–Integratedhybridsolarefficiencyandconsumptionenergy-HVACsystemsconsumptionandcarbonsaving–Transitionedtoacrossemissions.opportunitiesenergy-efficientLEDs.–CompressorheatrecoveryMahindra’sexist.operations–Identified–Implemented–Energyefficientequipmentareaswithhighprocesschangessuchasbrushlessdirectenergyuse(e.g.DCmotorsforcurrentfansandelectronicallyhigherefficiency)commutatedblowersBlockersandunlockersResultsBlockerUnlockerEnergyefficiencyincreaseAutoFarmfroma2009baselineUpfrontequipmentHighlightingthefinancial95%investmentcostsbenefits,withtypical87%paybackof1-3yearsConcernsaboutplant70%60%58%61%shutdownsandimpactsGainingtop-level45%55%onqualityexecutivecommitmentstoenergyintensityAbsenceofeffectiveregulationsandlimitedReportingenergyimpactofcarbonpricingefficiencyprogressImplications2020202120222023AttractivebusinesscasesexistforsustainableGHGmitigation(FY2023)>11,000tCO2etechnologyinvestmentEnergyconserved(FY2023)>80,000gigajoulesSignificantimprovementcanbedriventhroughEfficiencyincrease95%in2023froma2009baselinewidespreadincrementalchanges(automotivedivision)NewfacilitiescanuseefficienttechnologiesInvestment(FY2023)>INR80milliontoensurelowintensityfromdayoneCostsavings(FY2023)>INR100millionSource:IBCmemberinterviewsTransformingEnergyDemand22CASESTUDY2PartnershipforcogenerationtransformationAramco:majoritystate-ownedenergycompany(listed)RegionSaudiArabiaTagsSectorIndustryFocusEnergyintensitymeasurementandreportingValuechaincollaboration;energyefficiencyEnergytransitionplanBusinesscaseCasestudybackgroundTask–AramcohasastrongexistingfocusonenergyintensitythroughIncreasetheefficiencyandreliabilityitscorporateenergypolicy.ofthecompany’sindustrialenergysupplytosupportenergypolicygoals.–Historically,AramcohadbeenpurchasingpowerfromtheNationalPowergrid,whichhadastandardgridenergyefficiency.Actions12345HolisticenergyStrategydevelopmentPartneridentificationInstallationofcogenerationOngoingoptimizationanalysis(cogen)units–Developeda–Identifiedjoint–Installeddigitizedmonitoring–Conductedcomprehensiveventureandthird-–Installed17cogenerationforallcogenunitsholisticmasterenergypartypartnerstofacilitiesforreliable,high-energyplantodeliveroptimizecurrentefficiencyenergygeneration.–Developedoptimizationsolutions,analysistoonthecorporateandfuturepowerincludingCHPsoftwareunderstandenergypolicy.projectneeds.–Upgradedpowercurrentblocksforinternalenergy–AppliedCHPsoftwareto45energyuse.–Thisincluded–Thisensuredbetterself-sufficiencyinpowercogenunitsacross17facilities.theinstallationassetmanagement.andheat.ofcombinedheat–Thismaximizedefficientcogenandpowerplantsunitoperationbyaligningoutput(cogenerationunits).tocurrentandplannedneed,avoidingexcesssteamgeneration.BlockersandunlockersResultsBlockerUnlockerCorporateenergyintensityCogenerationunitsExtensivedataanalysispriortoinstallation-23%1arehighlycomplex,OngoingdigitalperformancemonitoringriskingenergywasteCreationofcustomsoftwaretooptimizeoperations148BTU/BOE2HighcostofAbilitytousewastednaturalgasfrom113BTU/BOEinstallationandoperationsasafuelpotentialdowntimeduringinstallationDesignofcommercially-drivenbusinessmodelthatenablesefficientwheelingofexcesspowertofacilitieswithoutcogenerationassets,generatingrevenueImplications20112022EnergyintensityprojectsshouldbeexaminedAchievedatotalhigh-efficiencypoweroutputof5.3GWforrevenueaswellascostopportunitiesandexportedsurpluspowertothenationalgrid.PartnershipsandclusteringcanhelptodeliverCO2emissions37milliontonnes/yearreductionchangewherethereisaninsufficientbusinesscasetodriveactionalone(e.g.viajointventures)Notes:1Totalenergyintensityhassteadilyreduced,drivenbyboththecogenerationprogrammeandseveralotherenergyDigitizationofferstheopportunitytofurthermanagementprogrammes2Britishthermalunit/barrelofoilequivalentcontinuallyoptimizeCapEx-ledsolutions3CO2emissionsreductiondrivensolelybycogenerationprogrammeTransformingEnergyDemand234.2BuildingsTheopportunityThissectorrepresentsabout30%ofglobalandequipmentinstalledinthem(aroundenergydemandandapproximatelyone-thirdof20%).18,19,20InterventionshavebeenidentifiedglobalGHGemissions.Thisenergyisusedinthatcouldreducebuildingenergyintensityconstruction,heatingandcooling(around50%),approximatelyby38%,reducingoverallgloballighting(around20%),andoperatingappliancesenergydemandby12%.FIGURE15EnergyimpactofindividualinterventionsinbuildingsVarioustimeperiods,geographies75%46%34%46%70%SavingsEfficiencyCollaboration65%60%55%50%45%40%35%30%25%20%15%10%5%0%Notes:Datarepresentstheimpactofindividualinterventionsonasubsetofenergyuse(e.g.theimpactofLEDlightsonlightingenergyintensity),nottheimpactonbuildingsenergydemandorglobalenergydemandasawhole.Bluedatapointsrepresentthemedianimpactofindividualinterventions.DatapointsusedcomefromacombinationofIBCmembercasestudiesandwiderresearch.TransformingEnergyDemand24FIGURE16EnergydemandinterventionsinbuildingsDemandinterventionsinbuildings1Energysaving2Energyefficiency3Valuechaincollaboration–Adjustingroomtemperaturescloser–Wholebuildingretrofit(includingroof,toexternalconditionswallsandwindows)–Districtheatingandcoolingsystems–Enhancedcircularity(includingon-site–Closingunder-usedspace–Digitalizationofbuilding–Turningoffunusedassets(e.g.lights,managementsystemsenergyproductionandstoragesolutions)andgreenermaterialuseequipment)–InstallationofefficientHVACequipment–Changestobuildingdesign–Electrificationofheat–Districtenergymanagementsystems–LEDlighting–Demandresponseprogrammes–Replacementofoldequipment(e.g.computers)Whileenergysavingsareapplicableinallbuildings,Cooperationbetweenthepublicandprivatesectorenergyefficiencyandcollaborationscanbeclassifiediskeybothtofundretrofitprogrammesandtointointerventionsthatimproveenergyintensityofsecuregreenbuildinguptake,includingintegratingexistingbuildings(retrofitting),newbuildings(greengreenanddistributedenergysystems.Forexample,buildings)andremovalofoldbuildings(end-of-life).realestatedevelopersinBrazilhaveengagedinretrofitprojectssuchasenergy-efficientlightingInEMDE,thereshouldbefarmorefocusonandintegrationofsmartbuildingsystemsforbuildingcodesasmostpopulationgrowthiscommercialofficebuildingstomeettheincreasingexpectedthereandmainlyincities.Twothirdsofdemandformodernandsustainableworkspaces.therequirednewbuildingsareincountriesthatcurrentlylackbuildingenergycodes.21TransformingEnergyDemand25Detailedsector-specificexample:buildingretrofittingContextby2050alreadyexist.22Moreover,energyusedforbuildingoccupationrepresentsabout70%ofRetrofittingisthekeyinterventionavailabletobuilding’senergyconsumption.23drivemeaningfulimpact,quickly.Thisisbecause,globally,75%ofbuildingsthatwillbestandingSizeoftheprizeFIGURE17Impactofinterventionsonexistingbuildingsenergydemand2950151299979642022energyImpactofmaking2030Impactof2030Impactofambition2030ambitionconsumptionnoenergy“noefficiency”achievableenergydemandinterventionsachievableenergyinterventionsefficiencyprogressscenariodemandSource:IEA,WorldEnergyOutlook2023,2023.ThispotentialwillcontinuetogrowasAIsolutionsEnergydemandinterventionsbecomemoredevelopandprevalent.AnexampleofanalreadyexistingenergysavingsinterventionRetrofittingisadisaggregatedsetofinterventions.usingAIisinHVAC,whereinstallationofAI-MostareCapEx-ledenergyefficiencytypes,drivenHVACmanagementsoftwareforexistingbasedoninstallationofhigherefficiencysystems,equipmentcanleadtoreductionsinHVACenergyequipmentandbuildingmaterials(seecasestudy3useofupto25%.forexamples).Beyondreducingenergyintensity,retrofittinghasNewbusinessmodelsareemergingbasedonmorethepotentialtoprovidebroadersocioeconomicdistributedenergysources,particularlyfordistrictbenefitssuchasreducingstaffsicknessby20%,heatingandcooling.Forinstance,theCityofParis’improvingemployeeproductivity(upto$7,500perdistrictcoolingnetwork,operatedbyFraîcheurdepersonperyear)andthecreationof3.2millionParis,planstocutCO2emissionsbyupto50%newjobsperyear.24,25Additionally,assetvalueswithforecastedsalesof€2.4billionoverthe20-yearofretrofittedbuildingsincreasebyapproximatelyconcessioncontractperiod.15%,allowingforrentalpremiums.Widervaluechaincooperationisrequiredtoretrofitbuildingsatscaleandturnthemintokeyactorsoftheenergysystem.TransformingEnergyDemand26CollaborationstoovercomebarrierstoactionCashflowsandfinancing:Designingcustomizedbundleinterventionsandimproveagency,thusgreenleasingandfinancingproductsthatenableincreasingthetransferofrisksforretrofittingtoeasypaybackatlowercostswouldsupportuptake:insurancecompanies.–Launchofzero-interestenergyefficiency–EnergysavingsinsurancecanenablebusinessprogrammeswithcustomerspayingtheloanmodelsforSMEswithlimitedbalancesheetsandthroughenergybillswithamaximumpaybacklimitedabilitytoprovideguarantees,eventhoughperiodoffiveyearsforinsulation.26thequalityoftheirprojectworkmaybehigh.28–Supportthegrowthoftheenergy-as-a-serviceDevelopalocalretrofitnetworktoupskillmodelwithnoupfrontcostandsharingofworkersandsecurecriticalmaterial:energybenefitsbetweenthepayorandthesupplierandco-investmentmodelsbetween–Cooperateatlocallevelswithcities,dwellersandtenants.27universitiesandtechnicalschoolstoensureapoolofskilledresources.–Lackofagencyanddesegregationareotherkeybarriers.Creatingclustersbetweeninsurance–Cooperatewithlocalindustrialclusterstocreatecompanies,propertyownersandretrofitterstocriticalmaterialsupplyavailabilityandcircularitycreateriskinsurancewillallowbusinessesto(includingrecycling).BOX2GreenbuildingsDesigninglower-intensitybuildingsisakeypartThemajorbarrierstotheuptakeofgreenoftheenergytransition,ascitiesareexpectedtobuildingsareincreasedcost(around15%orgrowaround50%by2050.Thiswillbeparticularlymoreforresidentialand3-5%forcommercial30,31)significantinEMDE,where80%ofthegrowthincomparedtotraditionalbuildings,aswellasbuildingsisexpected.Keyaspectsofgreenbuildinglimitedawarenessoftheprinciplesorbenefits.designincludetheuseoflower-intensitymaterials,highlevelsofinsulationtoallowforpassiveheating,Companiescanaddressthischallengebydesigntoalignbuildingsformaximumnaturalsecuringguaranteedenergydemandofftakesfromlightabsorption,aswellaselectrifiedheatingandcorporatebuyers,includingbyconsideringthecooling.Combined,thesecanadditionallyreducetotalcostofownershipratherthantheinitialcostbuildingrunningcostsbyapproximately40%.29only.Widespreadchangewouldalsolikelyrequiregovernmentinterventioninstandardsandbuildingcodes(seegovernmentleadershipsection)TransformingEnergyDemand27CASESTUDY3SingaporeheadquarterretrofittingSchneiderElectric:globalbuildingtechnologiescompanyfocusedondigitalautomationandenergymanagementRegionSingaporeTagsSectorBuildingsFocusEnergyefficiencyEnergyintensitymeasurement&reportingEnergymanagementsystemGovernmentengagementCasestudybackgroundTaskIn2017/18,SchneiderElectricacquiredanexisting,–Transformtheofficeintoasustainablefacility25-year-old,multi-tenantbuildingtobeitsnewEast–DemonstrateretrofittingexpertiseandsavingsAsiaandJapanheadquarters.–Supportthecompany’sclimategoalsActions12345AssessexistingEvaluatenewsite:LiaisewithexistingInstalllow-energyOngoingoptimization:footprint:tenants:intensityequipment:–Evaluatedthe–Deployeddigitaltwin–Assessedcurrentenergyfootprint–Workedwithbuilding–Installedsmartforenergymodellingenergyuseacrossfourofthenewsite,tenantstounderstandHVAC,LEDs,withoccupancyandsitesandconcludedenergyuseLEDlightingoperationsdataaconsolidationwould–Identifiedsystemsalignwithcorporatemajorareasof–Designedcustomized–Integratedreal-timeenergygoalsenergylossandenergysolutions–Implementedweatherforecastsintoexpenditureforexistingtenants,onsitesolarthebuildingmanagement–SelectedasinglesitealignedthroughgenerationandsystemforimprovedinKallangPulse–Decidedonasinglebuildingstoragefor100%energyefficiencyandmeasurestomanagementsystemrenewableenergyperformanceimplementBlockersandunlockersResultsBlockerUnlockerElectricityconsumptiondecreasefrom2018-2020ExistinginefficientDeployingvariousdigitalsolutions-45%buildingsposestructuraltoovercomeandadaptlimitationschallengesDiversetenantneedsSoftware-managedsystembalancescreatevaryingenergyenergyuseinbuildingenablingthedifferentdemandchallengesentitiestobalanceouttheirenergyuseVariableengagementEngagementwithtenantsinenergyintensityfromtounderstandneedstenantsPolicysupportfromSingaporeangovernmenttoincreaseattractiveness(grants,information,certification)Implications20182020ElectricityconsumptionReduced45%PotentialtoreduceenergyintensityinbuildingsWatersavingsperyear3,700m3regardlessofsizeandageTransformingEnergyDemand28Digitizingbuildingsenablesflexibleretrofittingformulti-tenantpropertiesGovernmentengagementcanhelpovercomefinancialbarriersandraiseawareness4.3TransportTheopportunityTransportconstitutesthemovementofgoodsandenergyconsumption,respectively.33Interventionspeople(excludingoff-roadindustrialvehicles).havebeenidentifiedthatcouldreducetheenergyItrepresents26%ofglobalenergydemandandintensityofprocessesbyupto90%.Ifwidely21%ofGHGemissions.32Thisstudyfocusesonapplied,theywouldreduceenergyintensityofsector-specificexamplesinroadtransportandtransportationby21%,resultingina5%reductionaviation,representing76%and10%oftransportinoverallglobalenergydemand.FIGURE18EnergyimpactofindividualinterventionsintransportVarioustimeperiods,geographies90%38%14%33%85%SavingsEfficiencyCollaboration80%75%70%65%60%55%50%45%40%35%30%25%20%15%10%5%0%Note:Datarepresentstheimpactofindividualinterventionsonasubsetofenergyuse(e.g.theimpactofmovingfrombusinessclasstoeconomyclasstravel),nottheimpactontransportenergydemandorglobalenergydemandasawhole.Bluedatapointsrepresentthemedianimpactofindividualinterventions.DatapointsusedcomefromacombinationofIBCmembercasestudiesandwiderresearch.TransformingEnergyDemand29FIGURE19EnergydemandinterventionsintransportDemandinterventionsintransport1Energysaving2Energyefficiency3Valuechaincollaboration–Modalshiftingawayfromhigher–Switchtosmallervehiclesorreduceenergyintensityformsoftravelandvehicleweight–Electrificationoftransportuseofpublictransport–Switchingtorenewablefuels,includingSAF–Switchtonewer,moreefficientvehicles–Moreefficientdriving–Optimisedroutingplanningandautomation–TrafficmanagementTechnicallyandeconomicallyviableinterventionsIntotal,94%oftheprojectedgrowthintransportareavailablethatcanreduceenergyintensityofenergyuseoccursinEMDE.However,thelackofindividualtransportactivitiestoday.Applicabilityreliablegridcapacitymakesvehicle(mainlytwoandvaries,withsavingsandefficiencybroadlyavailablethreewheelers)electrificationcomplexandinhibitsglobally,whereasfuelswitchingwillonlybepossiblecostparityforlow-intensitytransportoptions.wheresupportinginfrastructureexists(e.g.gridToencourageelectrificationuptake,collaborationcapacityforEVs).However,theseinterventionsbetweenallstakeholdersiskeytosupportgridcanhaveasignificantimpactwhilethebigger,expansion,greenenergysupplyandadequate“gamechanger”interventionsarebeingdevelopedpublictransport.Businessescantakethelead(e.g.electricaeroplanes).ontransitionofsystemsbyswitchingtheirownfleets,asisbeingdonebysometaxicompanies.ThissimilarlyappliestoapplicationsofAI,whichCompaniescanalsocapturelow-hanginghasalreadybeenusedtooptimizeuseoffreightopportunitiestoimproveintensitybymovingtocapacityinroadtransport,reducingemptyspacemoreefficientvehiclesandalternativefuelsintrucksbycombiningloadsandowners.ThisreducesthenumberoftrucksneededoverallintheInKenya,astart-upiselectrifyingbikesthroughthenetwork,andsoenergyintensityoftransport.Thisgradualrolloutofbattery-swappingstations.Thestart-typeofsolutioncanbedeployednowwhilenewupispayingaroundathirdofthepricefornewelectricAIapplicationsaredevelopedlongertermtodrivebikes,whilecustomerspayadailysubscriptionformoretransformativechange.theoutstandingbalanceandaccesstobattery-swapstations.Profitsformotorbikeandscooterdriversarearound$6-11adaysincejoiningthescheme.TransformingEnergyDemand30Detailedsector-specificexample:EVrolloutTheopportunityIttookNorwayover20yearstoreachthepointwhereWhilethisisasignificantopportunity,itshouldmostcarssoldwereelectric,andtheproportionnowbenotedthatelectrificationisstillnascentfortops80%.34Electriccarsarenowcheaper(aroundheavyvehicles,whichmakeuparound38%33%pricedecrease2010-19),35moreavailable,andofemissions;38freightaccountsfor78%ofhavebetterranges(2.7timesaverageincreasefromheavyvehicles.Additionally,theviabilityof2010-2136)thaneverbefore.Asaresult,EVrolloutiselectrificationiscurrentlylowerintheGlobalSouthoccurringfasterthanever.Electrificationdrivesbothduetogridcapacity.Companiesinallcountriescanloweremissionsandefficiency,asEVscanbeuptoactnowthough,reducingenergyintensitythroughapproximately50%moreefficientthanICEvehicles,37usingmoreefficientvehicles,andemissionsintensitywiththeimpactonemissionsbeingamplifiedifinputthroughalternativefuels.electricityislow-orno-carbon.Fullelectrificationcouldleadtoareductioninglobaltransportenergydemandbyupto22%.Collaborationstoovercomebarrierstoaction(passengervehicles)EVscanInfrastructureandchargepointavailabilityareChargepointoperatorscanworkwithrealbeuptokeybarriers.Onlymarketswithlargeandflexibleestateowners,energycompanies,financeandapproximatelygridcapacity,ideallywithrenewableenergysupply,governmentstoacceleratechargepointrollout50%morearewellsuitedtorollout.Permittingandgridbyidentifyingattractivelocationswithexistingefficientthanconnectionsforchargepointsareoftencomplex,parkingspaceforfurtherrollout(e.g.supermarkets,ICEvehicles.resultinginslowrollout.workplaces,hotels)andofferinstallationwithsharedrevenuemodels.Energycompanies,financeandgovernmentcanimprovetheeaseofgridconnectionsbytargetingAffordabilityisanotherchallenge.Toencourageplanninganddevelopmentofgridenergycapacityfleetadoptionandovercomeconcernsaboutandflexibility,includingthroughdistributedenergyaffordability,carmanufacturersandothergenerationandstoragesolutions.TheycanlobbystakeholderscanruninformationalcampaignsforsimplifiedandprioritizedplanningprocessesontherelativebenefitsofEVsandoptionsforgridconnections.Theycanalsoprovideprivateavailable.Co-investmentfromfleetowners,capitalandlabourtosupportgridconnectiongovernmentandmanufacturerstosubsidizecreation.Financingandenergycompaniescantheuptakeofvehiclesthroughreducingupfrontcreateproductstoacceleratechargepointrolloutcostsortotalcostofownership.bothathomesandincommerciallocations.BOX3AviationAviationisafast-growingareaofenergyuse,withforgovernmentsandindustriestocollaboratepassengertravelforecasttogrowatapproximatelyonidentifyingsolutionstoaddressthisissueand4%perannum,39drivenbypopulationexpansionimprovethefinancialcaseformoreefficientflight.andincreasedglobalwealth.Sustainableaviationfuels(SAF)presentanWithoutaviablealternativetojetfuel,actorsacrossopportunitytoabatetheremainingenergyuse,thevaluechaincanworktodrivechangethroughusingexistinginfrastructureandreducingupfrontenergysavingsandenergyefficiencymeasures.Thisinvestmentstodrivechange.ThemainlimitationcanincludechangestotravelpolicytoencourageofSAFissupplyofinputfeedstockfromwastetheuseoflessenergy-intensiveoptions,likerail.Thissourcesincreasedcostcomparedtostandardcanbecomplementedbyusingcarbonfootprintjetfuel.Offtakeagreementscanhelptocreatetravelbudgetsandcompensationmetrics,includingnewdemand,enablingtheSAFmarkettoscale.datainbookingplatformsandeducatingemployeesBusinessessuchasBostonConsultingGrouptodrivebehaviouralchange(seecasestudy3).(BCG)havecommittedtoreplacing5%ofitsconventionaljetfuelwithSAFby2030andhaveManufacturersandairlinescanprioritizeweightsignedofftakedealswithairlines,fuelproducersreductionandreplacementofolderaircraftwithandcoalitionssuchastheSustainableAviationmoreefficient,modernmodels.ThereispotentialBuyersAlliance.TransformingEnergyDemand31CASESTUDY4ModalshiftingviaemployeeincentivesKearney:GlobalmanagementconsultancyRegionGlobalTagsSectorTransportBehaviouralchangeInformeddecision-makingFocusEnergysavingsSeniorleadershipbuy-inCasestudybackgroundTaskKearneyisthefirstglobalconsultingfirmwithSBTi-approvedReduceairtravel,tosupportachievea30%absolutereductionnear-andlong-termnet-zeroemissionsreductiontargetsinscope3businesstravelemissionsby2030,inlinewithSBTinear-termtargetsActions1234Baselining:Buildguidingpolicies:Developeffectiveinitiatives:Track,monitorandgrow:–Ongoingtracking–Established–GlobaltravelpolicyGloballevel:Locallevel:thebaseline–Implementedair–Country-andreportingtolevelof–Variedthislocallydrivetransparencybusinessbasedonavailabletraveldashboardsspecificpolicies–Reviewedpoliciestraveltravelinfrastructureatofficelevelandinitiativeswithemployeesactivitytopromote–Planningforaninternalacross–Pushed–Promotedhybridsustainabletravelcarbonpricein2024thefirmcommunicationandremote(e.g.carpoolingonpolicychangesworkingbetweenandreasoningemployees).BlockersandunlockersResultsBlockerUnlockerFlightsperemployeeLackofreal-timethird-partyDevelopedanin-house-50%carboncalculatorscarbontrackingsolutionEmployeeengagementlevelsImplementedemployeefeedbackmechanismsStrongon-siteworkingmindsetCollaboratedwithsuppliersforITintegrationEmployedatargetedcommunicationsstrategywithtransparencyWorkingwithteamsinhybridformatsImplications20192022ContinuousmonitoringandprogresstrackingDouble-digitbusinessgrowthwhilehelpsmakeinformeddecisionsreducingflightsperemployeeby50%Demonstratesimpactoflow-costchangeswithoutrestrictinggrowthSource:IBCmemberinterviewsTransformingEnergyDemand325GovernmentleadershipGovernmentscandrivechangethroughenergytransitionplans,public-privatecollaboration,andsector-specificregulation,incentivizationandinformation.Governmentshavealreadybeguntoincreasefocusoftaxesandsubsidiesandincreasethefocusonenergydemand,withorethan120countriesontheenablingenvironment,targetingindividualpledgingtodoubletheaverageannualrateofsectorsorevenspecificinitiativeswithinsectors.energyefficiencyimprovement.Tobeeffective,Therearenumberofhigh-levelandspecificactionspolicy-makersneedtobuildonthetraditionaltoolsthatallgovernmentscantaketodrivethetransition.EnergyintensitypolicyrecommendationsFormulateanenergytransitionplanThemajorityofcountrieshavesetnet-zerotargetswhilelargelyignoringmeasurestobettermanageorcommittedtodoublingtheglobalenergyenergyconsumption.Itisthereforerecommendedefficiencyannualrateofimprovement.However,thatallgovernmentsproduceenergytransitiontheyarenotroutinelysupportedbyadetailedplansthatfocusasmuchonenergydemandasdeliveryplan,letaloneadetailedenergytransitionenergysupply.Thenecessarycharacteristicstoplan.Theexistingplansaretypicallylong-datedincludearesetoutinFigure20.(2040orbeyond)andfocusonthesourceofenergyFIGURE20Maindemand-lenscharacteristicsandactionstointegrateinanenergytransitionplanEnergytransitionplanningLeadInformRegulateIncentivizeConveyaclearambitionandFocusonimprovingProvideclearguidelinesonSetbothpositiveandnegativepathforenergyintensityawarenessamongperformanceandsupportincentivesforaction,including:–Defineambitioustargetssocietyvia:permissibleactivitiesthat–Carbonandenergytaxes–Transparent,publicpromotelowerenergy–Taxreliefonenergyefficiencyoverallandpersectorlinkedintensitythrough:tobroaderglobalgoals(e.g.datatrackinginvestmentsdoublingtherateofenergy–Publicbenchmarksof–Mandated,funded–Certificationschemesforefficiencyimprovement).energyaudits–Prioritizeachievingchangeexpectedperformancebestpractice.inownoperationsbyindustry.–Inclusionofenergyintensity–IdentifyareastoreduceintogreencertificationTransformingEnergyDemand33energyintensityand,whereprogrammesthisisnotpossible,focusonreducingcarbonintensity–Liberalizeenergymarkets–Createacentralizedtoallowcaptivegeneration,delivery/coordinationteamenergywheelingandcomposedofbothpublicdynamicpricingandprivateactorswithexecutiveassessmentand–Simplifypermittingprocessesdecision-makingrights.forsupportinginfrastructure(e.g.gridandsupplydevelopment)–Upskillworkforcefordelivery.EMDEanddevelopedeconomiesChallengesandopportunitiesrelatedtothatonly0.4%oftheinstalledlightingbasewereimplementingenergytransitionplansvarywidelyefficientLEDs.Uptakewaspreventedbythehighacrossgeographies.ThepoliticalandeconomiccostofLEDbulbs,eventhoughtheyuse75%lesscostofimplementationwillalsovarysignificantlyenergyandlastingaround25timeslongerthandependingonthespecificenergysupplyandincandescentbulbs.Thegovernmentovercamedemandsituationofeacheconomy.thisbarrierinfourways:Indevelopedeconomieswithlarge,diverse–Createdatenderforlarge-scaleLEDsourcesofupstreamenergyanddense,integratedbulbprocurementtransmissiongrids,itmakessensethatthepushtodecarbonizefocuseslargelyonaddinglarge-–Signedofftakevaluechainagreementswithstatescalerenewablestothecurrentgrid.Atthesamegovernmentsandutilitiestodistributebulbstime,thereareclearinherentbenefitstopursuingenergyintensityreduction.Thisisbecause,by–Providedtwopaymentoptions:upfrontandreducingenergyintensity,outputcanincreaseforon-billrepaymentsthroughelectricitybillsthesameorloweramountsofenergy.Thislimitstotalenergycosts,supportingprofitabilityand–Builtswapschemesforruralhouseholdswheremaintainingcompetitiveness.oneLEDbulbcouldbeswappedforaworkingincandescentbulb.Incontrast,inEMDEmarketswithmorelimitedenergysourcesandlimitedgridintermsofCreatingeconomiesofscaleforLEDbulbsloweredscaleandconnectivity,combiningeconomicupfrontcostsperbulbtoaslowas$0.8.Thisdrovegrowthalongsidemeasurestomanageenergytheuptakeofmorethan1.15billionLEDlightbulbsconsumptionandsecuresupplyiscritical.Thereisby2020,resultinginannualsavingsofover$2.5anurgentneedforthepublicsectortoshapeandbillionandaround47billionkilowatthours(kWh).40drivelocal,highlyadaptedenergytransitionplans.ThisisanexampleoftheopportunitythatEMDEAnexampleofsuccessfulEMDEpolicyplanninghave:to“leapfrog”fromhigher-tolower-intensityisIndia’sUJALAprogramme.In2015,Indiatechnologies,avoidingtheincrementalretrofitchangesrecognizedsignificantlevelsofwastedenergythatdevelopedeconomieshadtopursueovertime.andcostindomesticlighting,whichrepresentedThisappliesacrosseachoftheBITverticals:27%ofdomesticenergydueinparttothefactFIGURE21Variationsinpublicsectoractions’applicabilityinEMDEIndustryBuildingsTransportExamplesofpublicsectoractionsExamplesofpublicsectoractionsExamplesofpublicsectoractions–Increasegridreachtopromote–Enableelectrificationoftwo-and–Launchawarenesscampaignselectrificationofheating,smelting(standardsandregulations)three-wheelers,enabledbydistributedandextractionenergysolutions–IntroduceMEPSforelectricmotors–Designandenforcebuilding–Enforceminimumfuelstandardsacrosssectorscodes(MEPS)andlaunchlargeforvehicles–Disseminateinformationandretrofitprogrammes(startingwith–ImprovepublictransportprovisionregulationsregardingEnMSusepublicbuildings)toenablemodalswitching–Investingridcapacityformodular/micro-gridsolutionsandstandardizepermitting–SupportworkforceupskillingCasestudyFrom2015-2017,theMexicangovernmentundertooktheCONUEEprogrammetopromoteEnMSamongSMEs.ThisinvolvedthedisseminationofinformationandtrainingofworkersonEnMS.Theoutcomesoftheseinitiativeswereannualenergysavingsof57.7gigawatthours(GWh),14.8kilotonnes(kt)ofCO2reductioninemissions,$5millionsavedinenergycosts,andimprovementsinproductqualityandoverallproductivity.Source:AsiaPacificEnergyResearchCentre,CompendiumofEnergyEfficiencyPoliciesinAPEC,2017.TransformingEnergyDemand34Inform,regulateandincentivizeatasector-specificlevelWithineachvertical,governmentscantakesectortoovercomebarrierstoaction.Figures22,actiontouseandencouragetheleverspresented23and24representanon-exhaustiveselectioninthispaperandcancollaboratewiththeprivateforfurtherdiscussion.FIGURE22Identifiedactionsfor“industry”tointegratetheenergyconsumption-lensofenergytransitionplanningIndustryRegulateIncentivizeInformStandaloneactionsStandaloneactions–Mandateprocurementoflower-energy–BuildintaxreliefoninvestmentsintoCollaboration–Launchindustryinformationcampaignsonmaterialsandproductsingovernmentenergyefficiency–e.g.fasterprocurementprocesses–e.g.throughequipmentamortization.availabletechnologyandbestpracticetocarboncontractsfordifference.drivebehaviouralchange.–IntroduceminimumenergyperformanceCollaboration–Introduceenergyintensitylabellingforstandards(MEPS)acrossindustries.–Providefundingforscrapsteelmachineryandprocesses.–Provideenergyaudits.–Createpublicbenchmarksofexpected–Introducenon-energybenefitstopolicyrecovery,includingfromgovernment’senergyintensitylevelsbyindustrytobusinesscases.ownproducts.highlightunderperformance,increase–Promotetheuptakeofenergymanage-–Providefundingandstructuresforawarenessanddriveaction.mentsystems(EnMS),energymeasure-collaborationbetweenindustryplayers.mentandmanagementframeworks(e.g.ISO50001).Collaboration–Legislatetoincreasebarrierstohigher-in-tensitysteelpurchasingforcompaniesExampleofpublicsectoraction:industryEconomiessuchastheEU,theUS,Canada(IE)standards.ThisswitchcontributedtoanandJapanhaveintroducedminimumenergyapproximate20%reductioninenergyconsumptionperformancestandards(MEPS)forindustrialelectricintheJapanesemanufacturingsectorbetweenmotors.Theserequirethatallmotorsareswitched2000and2012.41toIE3orhigherintheinternationalefficiencyTransformingEnergyDemand35FIGURE23Identifiedactionsfor“buildings”tointegrateinademand-lensenergytransitionplanBuildingsRegulateIncentivizeInformStandaloneactionsStandaloneactions–Createminimumefficiencybuildingcodes–AllocateprogrammesanddedicatedfundingCollaboration–Launchpublicawarenesscampaigns.forhousesandcommercialbuildingsthatforwidespreadretrofittinginterventionsand–Mandatedigitalpublictoolstotrackincreaseovertime.electrification.–Legislatetorequiregreenbuildingdesignenergyconsumption.acrossnewbuildstoalignwithaCollaboration–Publishinformationonbuildingzero-carbonworld.–Providesupportforthecreationandprovision–Shortenadministrativeprocedures,performanceandstandards.includingpermitting.ofgreenmortgagestofundretrofitting.–Legislatetorequirescrapsteeltobe–Investinlocalenergycommunitiestoprovidedfromanybuildingatend-of-life.generatejobsandeconomicgrowth,aswellasincriticalmaterialandrecyclinghubs.Exampleofpublicsectoraction:buildingsIn2010theCaliforniaPublicUtilityCommission42purchaseforwaterheatpumpsandEVcharginglaunchedazero-interestfinancingprogrammetoinfrastructure.Customerspaytheloans(rangingfundenergyefficiencyinvestmentandassistnon-from$5,000to$4million)throughmonthlyresidentialenergycustomerstoretrofitbuildings.instalmentsontheirenergybillswithamaximumSinceAugust2023,theprogrammealsosupportspaybackperiodoffiveyears.FIGURE24Identifiedactionsfor“transport”tointegrateinademand-lensenergytransitionplanTransportRegulateIncentivizeInformStandaloneactionsStandaloneactions–Reduceaveragevehiclesize/weight–Investinpublictransport,includingCollaboration–Setgovernmenttravelpoliciestosupportallowances.expandingexistingcitiestoallowformodalshifting.lowerintensitytransportuse.Collaboration–Investinoptimizedrouteplanningforall–Implementpoliciesandincentivesthatlocalandnationalfleetvehicles.supporttheuptakeofzero-andlow-emissionvehicles(suchasEVs).–Setmandatorylow-emissionszonesincities.–Reviewplanninglegislationtoensurechargingpointshaveapriorityfocus.–ReviewgridinfrastructureplanningtoensuresufficientelectricalcapacityandconnectionpointsforEVs.–Useofdemand-basedsignalsforphase-outofhigheremissionvehicles,timedincollaborationwithprivateactors.Exampleofpublicsectoraction:transportTheshiftfrominternalcombustionengines(ICE)tothegradualphasingoutofthetaxdeductibilityforEVsinBelgium–nowaround50%ofthenewvehiclesICEby2028infavourofEVs(whichmaintain100%market–wasacceleratedthroughtheuseoftaxdeductibility)aswellasproviding200%taxdeductibilityincentivesforcompanycars.Theprogrammeincludedforchargepointsinthefirstyearsforuptake.43TransformingEnergyDemand36ConclusionTransformingenergydemandneedstobeasmuch–Examineenergycostsandtheopportunitiesafocusofglobaleffortastransformingenergytodrivechange.supplytoacceleratetheenergytransitionanddelivercommercialbenefit.Torealizethepromiseof–Committoenergyintensitytargets(e.g.doublingsuchefforts,businessesshould:therateofenergyintensityimprovement).–Baselineenergyuse,ensuredirectcentral–Engagewithpolicy-makerstodevelopdetailedaccountabilityanddevelopaprogrammetopolicyframeworksandenergytransitionplans,increaseefficiencyacrossthethreelevels.inparticular,toremovecurrentblockerstoaction(e.g.accesstofinancing).–Embedthisexerciseandtargetsettingintoafullenergytransitionplancoveringself-helpandTheIBCwillcontinuetoexplorewaysinwhichthecollaborationwiththesupplychain.energydemandagendacanbeprogressed,movingintoasecondphaseoftheprojectin2024.TransformingEnergyDemand37AppendixA1ModellingmethodologyModellingaimI.Forexample,fortheinterventionofpassengervehicleelectrification,impact=–Quantifythepotentialimpact(sizeoftheprize)reductionofenergyvsinternalcombustionthatenergyintensityinterventionscanhaveifengines(ICE)vehicles,applicability=implementedoveratheoreticaltimescale.proportionofroadtransportrelevantto(i.e.lightvehicles)andpenetration=Approachexpectedproportionofvehicleselectrified.1.Identifytheimpactofanindividualintervention2.Calculatethecombinedimpactofidentifiedonavertical’senergyconsumption.interventionsonglobalenergyintensitya.Selectionofsectorsfordetailedinvestigationa.Selectionofinterventionstoincludeinachievableandambitioncasesi.Analysiswasstructuredaroundthreeverticals:buildings,industryandi.Twomodellingcasesweredefined:transport(BIT),totalling94%ofglobalenergydemand.I.“Achievable”wherewehadahighconfidencethattheinterventionwasii.Sectorswithinthesewerechosenfordeliverableandwheretherewasgooddetailedanalysisbasedonsectorenergyimpactdataavailability.consumption,sectorcarbonemissionsandrelevancetoInternationalBusinessCouncilII.“Ambition”,whichaddsfurther(IBC)members.interventionsontopofthoseinthe‘achievable’casethataremoredifficultiii.Finalsectorsselected:aviation,roadtodeliverorwherepotentialpenetrationtransport,commercialbuildings,residentialrateswerelesscertain.buildings,miningandextractive,steelandiron,chemicals,andotherindustry.ii.Interventionswerethensortedbetweenthesetwocases,withanyinterventionsb.Identificationofinterventionsandtheirimpactthatoverlappedremoved.i.Demand-sideinterventionsthatreduceb.Determinationoftotal“achievable”andenergyintensitywereidentifiedineach“ambition”impactbyverticalsector(e.g.energymanagementsystems)thathavebeenproventohaveanimpacti.Thescaledimpactsofeachinterventioninexistingcasestudies.determinedin1cweresummedforeachverticaltogiveanoverallimpactonenergyii.Theirimpactonasubcategoryofdemandintensitybyvertical.wasdeterminedbasedonexamplesfromIBCmembersandwiderdesktopresearch,c.Scalingofimpactbyverticaltototaleconomywithidentifiedreductionsinenergyintensityreachingashighas90%.i.Energyintensityreductionwasmultipliedbytheshareofenergydemandthateachc.ScalingofinterventionimpacttoverticallevelBITrepresentsin2022togiveanoverallreductionofglobalenergyintensityforbothi.Impactswerescaledtorepresentthetheachievableandambitioncases.totalpotentialimpactofaninterventiononanentirevertical.ii.Anaverageintensityreductionisappliedtosectorsnotconsideredindepth(definedii.Thiswasdonebymultiplyingtheimpactasother)identifiedin1btogetherwiththeintervention’sapplicability(i.e.therelevantportionofaI.Averageimpactwascalculatedasavertical’senergyuse)andthepenetration(i.e.weightedaverageimpactfromotheranestimateofthefeasiblelevelofadoptioninterventionsinavertical,oracrossthataninterventioncouldreach).verticalsforthe6%ofdemandnotinBIT.TransformingEnergyDemand383.Examinetheimpactofthisreducedenergyaveragepriceperexajoule(EJ)tostayintensityonenergydemandscenariosthesameovertheperiod.a.Creationof“noefficiency”scenarioc.Theenergyoutputofapowerstationwasmodelledbasedonavailabledesktopi.Tounderstandtheimpactofthesereductionsresearchdata.inintensityovertime,thereneededtobeunderstandingofwhattotalenergydemandi.Theenergyoutputofapowerstationiswouldbeinthefutureifnoimprovementsbasedontheaverageenergyoutputofweremadeinglobalenergyintensity.acoalpowerstation.I.Forecastsofenergydemandbasedd.Theabsolutechangeinenergyidentifiedinonhistoricaltrendsinenergyintensity(or3bwasthendividedbythisfiguretogiveanexistingpolicies)couldnotbeusedinorderillustrativelevelofnewpowerstationsavoided.toavoidoverlapwithidentifiedinterventions.Limitationsii.A“noefficiency”scenarioforenergydemandin2030wascalculatedby–TheaimofthismodellingwastoillustratetheremovingenergyintensityimprovementspotentialenergydemandreductionthroughfromtheInternationalEnergyAgency’sdemand-sideintervention,ratherthanbeingstatedpoliciesscenario(IEASTEPS)(i.e.adetailedindustryanalysis.currentpolicies)scenario.–Notallsectorsaremodelledindetail–sectorsI.2030wasselectedtoillustratewhatwereselectedbasedonenergydemand,couldhappeniftheinterventionswerecarbonemissionsandIBCmemberpresence.implementedbythispoint,ratherthansuggestingthatallinterventionsdefinitively–Withinsectors,selectedinterventionsarecanbedeliveredbythispoint.coveredindepth,whereimpactandapplicabilitycanbeconfidentlyquantified,andtheimpactofb.Applicationofinterventionimpactsto2030interventionsdoesnotoverlapwithothers.“noefficiency”scenario–Impactsarebasedonavarietyofsources,i.EnergyintensityreductionscalculatedincludingtheIEAandcompanywebsites,inin2cweremultipliedbyforecast2030additiontoprimaryresearch.Impactsfortheenergydemandfrom3a.widereconomyaremodelledtobeachievedinlinewiththesecasestudies.ii.Thiswasthensubtractedfromcurrentdemandandexpecteddemandgrowth–Interventionimpactsassumenotechnologicalundercurrentpolicies(IEASTEPS)toidentifyimprovementsbetweennowand2030.theabsoluteenergydemandchangeunderThismaybeconservativebasedonhistoric“achievable”and“ambition”scenarios.improvements,soactualreductionsinenergyintensitycouldbegreater.c.Modellingof2022-30energydemandin“achievable”and“ambition”conditions–Apenetrationvalue(i.e.scalingoftheimpactofinterventionbasedonexpectedfeasibility)i.Growthindemandwasmodelledisappliedtoallinterventionsbasedonourlinearlyfromcurrentdemandtoillustrateunderstandingofpossiblerolloutby2030e.g.potentialoverallprogressioninenergyassumingtheproportionofsteelproductionthatdemandto2030ifidentifiedinterventionswillswitchtoscrap-electricarcfurnacemethod.weretobeimplemented.ii.Thisassumesalinearrateofimprovement.4.Estimatetheimpactofthisreduction–Wheresectorsarenotcoveredindetail,anonenergyspendingandneedforenergyassumedimpactisusedbasedontheaveragegenerationcapacityimpactfromsectorscoveredindetailwithinthevertical(industry,buildingsortransport).Fora.Thecostperunitofenergyin2022theproportionofenergydemandnotcoveredwascalculatedbasedonIEAspendandbythethreeverticals,aweightedaverageenergydemanddata.impactisapplied.b.Thiswasmultipliedbytheabsolutechange–The“noefficiency”scenarioin2030isbasedinenergyidentifiedin3btogiveanillustrativeontheIEASTEPSscenarioandthelevelofenergysaved.assumptionsunderpinningitwithenergyintensityimprovementremoved.Subsequenti.CostperunitenergybasedoncurrentachievableandambitionmodelsimplicitlyspendonenergydividedbycurrentenergyrelyontheSTEPSscenario’spopulationanddemand.Thisthereforeassumestheeconomicgrowthassumptions.TransformingEnergyDemand39ContributorsWorldEconomicForumPwCRobertoBoccaJohnButterworthHead,CentreforEnergyandMaterialsSeniorManager,ProjectManagerRamyaKrishnaswamyCatrionaCampbellHead,Institutional​CommunitiesSeniorAssociateGabrieleLiottaMaëlleGomezLead,PublicPolicy,Strategic​Initiatives,SeniorManager,WorldEconomicForumFellowInstitutional​CommunitiesPennyMaloneyEspenMehlumAssociateHead,EnergyTransition​Intelligence​andRegionalAccelerationNiiAheleNunooManager,WorldEconomicForumFellowBiggieTanganeSpecialist,StrategicInitiativesandRobertTurnerInstitutionalCommunitiesPartner,ProjectLeadCharlesWhitehouseSeniorAssociateAcknowledgementsDellTechnologiesDowCompaniesengagedwithaspartofEnelevidencegathering:EniEYOverallInternationalBusinessGICCouncil(IBC)memberHEINEKENorganizationsengagementHoneywellHubertBurdaMediaABBInfosysAccentureIngkaGroupAfricanRainbowMineralsKearneyAgilityLippoGroupAllianzMahindraGroupAramcoManpowerGroupBain&CompanyMerckGroupBancoSantanderMUFGBankofAmericaNomuraHoldingsBASFOccidentalPetroleumBBVAOlayanFinancingCompanyBostonConsultingGroup(BCG)PaloAltoNetworksbpPwCChevronCiscoSystemsTransformingEnergyDemand40RepsolPeterHerweckRoyalPhilipsChiefExecutiveOfficer,SchneiderElectricS&PGlobalSalesforceMasayukiHyodoSAPRepresentativeDirector,PresidentandSchneiderElectricChiefExecutiveOfficer,SumitomoCorporationSiemensStandardCharteredBankJosuJonImazSumitomoCorporationChiefExecutiveOfficer,RepsolSumitomoMitsuiFinancialGroup(SMFG)SuntoryHoldingsIlhamKadriSwissReinsuranceCompanyChiefExecutiveOfficerandChairmanSyensqooftheExecutiveCommittee,SyensqoTDBankGroupTencentHoldingsMannyMacedaTheCoca-ColaCompanyChiefExecutiveOfficer,BainandCompanyTotalEnergiesUnileverBobMoritzVattenfallGlobalChair,PwCYaraInternationalPatriceMotsepeNote:Overallengagementincludesone-to-FounderandExecutiveChairman,oneseniorleaderconsultations,workshopAfricanRainbowMineralsattendance,chiefexecutiveofficersurveyresponses,detaileddemandsurveyresponsesDouglasL.Petersonandin-personconversation.PresidentandChiefExecutiveOfficer,S&PGlobalThisreportwaspreparedbytheIBCchairedbyBancoSantander,theWorldEconomicForumPatrickPouyannéandPwC,whofunctionedasknowledgepartnersChairmanoftheBoardandChiefExecutiveOfficer,totheinitiative.Thisinitiativewasledby:TotalEnergiesAnaBotinChristophSchweizerExecutiveChairman,TheSantanderGroup;ChiefExecutiveOfficer,BCGChair,InternationalBusinessCouncilAnishShahBobMoritzManagingDirectorandChiefExecutiveOfficer,GlobalChair,PwC;MahindraGroupOlivierSchwabBillWintersManagingDirector,WorldEconomicForumGroupChiefExecutive,StandardCharteredBankAchiefexecutiveofficerandchair-leveladvisoryAnumberofseniorleadersprovidedexpertisegroupprovidedstrategicguidanceonthisinitiative.onthisinitiative,including:Membersincluded:ElviraCalvoAdiegoAnaBotinSustainabilityBusinessTransformationHead,BBVAExecutiveChairman,TheSantanderGroup;Chair,InternationalBusinessCouncilFahadAl-DhubaibSeniorVice-President,StrategyandMarketClaudioDescalziAnalysis,AramcoChiefExecutiveOfficer,EniLucasAranguenaGlobalHead,GreenFinance,BancoSantanderKentaAshidaHead,ClimateChangeAdvocacy,CorporateSustainabilityDepartment,SMFGJamesBairdAssociatePartner,Bain&CompanyTransformingEnergyDemand41OlivierBlumJohnMurtonExecutiveVice-President,EnergyManagementSeniorSustainabilityAdviser,andMemberoftheExecutiveCommittee,StandardCharteredBankSchneiderElectricSushantPalakurthiRaoArneCartridgeManagingDirector,GlobalExternalRelations,AgilitySpecialAdviser,StrategyandBusinessDevelopment,YaraInternationalSaugataSahaPresident,S&PGlobalCommodityInsights,LuisCabraS&PGlobalExecutiveManagingDirector,EnergyTransition,TechnologyandInstitutionalAffairs,RepsolRobSchwiersChiefEconomist,ChevronCorporationLucasChaumontetManagingDirectorandPartner,BCGDanielaSellmannGlobalVice-PresidentandHead,EnergyPhilippeChauveauandUtilitiesIndustries,SAPHead,ClimateStrategy,SyensqoTakayukiSumitaBrianDamesManagingExecutiveOfficer,AssistantChiefChiefExecutiveOfficer,AfricanRainbowSustainabilityOfficer,SumitomoCorporationEnergyandPowerMasayukiTakanashiAshissDashGroupChiefSustainabilityOfficer,SMFGExecutiveVice-PresidentandGlobalHeadServices,Utilities,ResourcesandEnergy,InfosysAnkitTodiLead,GroupSustainabilityStrategySuzanneDiBiancaandPartnerships,MahindraGroupChiefImpactOfficer,SalesforceRobertTurnerRosannaFuscoPartner,PwCHead,ClimateChangeStrategyandPositioning,EniDanielWomackChristopheGirardotGlobalLead,ClimateandCarbonPolicy,DowVice-President,OneB2BSolutions,TransportandLogistics,TotalEnergiesTheworkcouldnothavebeenachievedwithoutthesupportandcooperationprovidedbymanyRuthHarpergovernmentbodies,organizationsandcompaniesChiefMarketingandSustainabilityOfficer,worldwide,notablytheInternationalEnergyAgencyManpowerGroup(IEA),GFANZ,theEuropeanCommissionandtheWorldEconomicForum’sFirstMoversCoalition.TomohiroIshikawaChiefRegulatoryEngagementOfficer,MUFGThisreportwaspreparedbyaprojectteamofmembersfromtheWorldEconomicForum,PwCShigeakiKazamaandBancoSantander.MembersadditionaltotheExecutiveOfficer;DeputyChiefSustainabilityOfficer,reportcontributorsinclude:SuntoryHoldingsAliciaLenzePwCVice-President,GlobalHead,SustainabilityMarketing,SAPNeilLoaderJonChadwickVice-President,CarbonAmbition,StrategyPartner,GlobalEnergyTransitionLeadandSustainability,bpEmmaCoxRobertMetzkePartner,GlobalClimateLeaderChiefofStaff,InnovationandStrategy;Head,Sustainability,RoyalPhilipsYoannDerriennicPartner,CapitalProjectsandInfrastructureLead,JudyMossierPwCFranceGovernmentalAffairsAdviser,UBSJeroenvanHoofSimonMulcahyPartner,GlobalEnergy,President,Sustainability,TIMEUtilities&ResourcesLeaderTransformingEnergyDemand42WilliamJackson-MooreAuthorsPartner,GlobalESGLeadDanielGrossReidMorrisonGlobalEditorialDirector,PwCPartner,GlobalEnergyAdvisoryLeaderandGlobalMatthewYeomansESGLeaderforEnergy,UtilitiesandResourcesFreelanceWriterNyaraiPfendeProductionSeniorManagerLaurenceDenmarkAndreaPlasschaertCreativeDirector,StudioMikoDirector,GlobalCorporateAffairsSophieEbbageandCommunicationsDesigner,StudioMikoMarthaHowlettBancoSantanderEditor,StudioMikoGeorgeBridgesSeniorAdvisertoAnaBotinPeterGreiffDirector,CorporateAffairsTheoLeonardDirector,InstitutionalAffairsBarbarraNavarroHead,Research,PublicPolicyandInstitutionalRelationsTransformingEnergyDemand43Endnotes1.InternationalMonetaryFund,TheRisingResilienceofEmergingMarketandDevelopingEconomies,2012.2.UnitedNations(UN),2022RevisionofWorldPopulationProspects,2022,https://population.un.org/wpp/?_gl=11ck7fl0_gaMTI2MzI2ODM1My4xNjk4MTUzNTEy_ga_TK9BQL5X7ZMTY5ODE1NzYwOC4yLjEuMTY5ODE1Nzc3NS4wLjAuMA.3.InternationalEnergyAgency(IEA),NetZeroRoadmap:AGlobalPathwaytoKeepthe1.5CGoalinReach,2023,https://iea.blob.core.windows.net/assets/13dab083-08c3-4dfd-a887-42a3ebe533bc/NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach-2023Update.pdf.4.IEA,WorldEnergyOutlook2023,2023,https://iea.blob.core.windows.net/assets/26ca51d0-4a42-4649-a7c0-552d75ddf9b2/WorldEnergyOutlook2023.pdf.5.Achievableisdefinedasinterventionsthatarecurrentlytechnologicallyavailableatscalewithassociateddataavailableontheirenergyintensityimpact.6.Demandinterventionscenariosarenon-exhaustiveandillustrative.Notallofthesemeasuresarelikelytobeachievedtotheextentmodelledbetweennowand2030,however,theimpactofeachmeasurewithinthemodellingisinlinewiththoseseeninexistingcasestudies.Asaresult,thetotalquantumofthechangeisanaccurateillustrationofthetotal“sizeoftheprize”onenergydemandfromtheinterventionsthathavebeenmodelled.7.COP28,GlobalRenewablesAlliance,IRENA,Triplingrenewablepoweranddoublingenergyefficiencyby2030,2023,https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Oct/COP28_IRENA_GRA_Tripling_renewables_doubling_efficiency_2023.pdf?rev=7824ef3346f64e7daa784f3440e30d278.Wohlfarth,K.,E.WorrellandW.Eichhammer,“Energyefficiencyanddemandresponse–twosidesofthesamecoin?”,EnergyPolicy,vol.137,no.111070,2020.9.IEA,WorldEnergyOutlook2023,2023.10.Hennessy,Leon,“Usingwireddrillpipetodrivedownwellcost”,OffshoreEngineer,2016,https://www.oedigital.com/news/448701-using-wired-drill-pipe-to-drive-down-well-cost.11.Ibid.12.“INTEGRATEDMODELGUIDEDPROCESSOPTIMIZATIONOFSTEAMCRACKINGFURNACES”,EuropeanCommission,30November2020,https://cordis.europa.eu/article/id/430156-cracking-steam-cracking-technology-with-eco-friendly-furnaces.13.“CombinedHeatandPower(CHP)Partnership”,UnitedStatesEnvironmentalProtectionAgency(EPA),n.d.,https://www.epa.gov/chp/chp-benefits.14.IEA,EnergyEfficiency2022,2022,https://iea.blob.core.windows.net/assets/7741739e-8e7f-4afa-a77f-49dadd51cb52/EnergyEfficiency2022.pdf.15.G20,StrategicPlanforAdvancingEnergyEfficiencyAcrossDemandSectorsby2030,2023,https://www.g20.org/content/dam/gtwenty/gtwenty_new/document/etwg_docu/8_G20%20ETWG%20Presidency%20Document%20-%20A%20study%20on%20Strategic%20Plan%20for%20Advancing%20Energy%20Efficiency%20Across%20Demand%20Sectors%20by%202030.pdf.16.Bhutada,Govind,“AlltheMetalsWeMinedin2021:Visualized”,VisualCapitalist,20October2022,https://www.visualcapitalist.com/all-the-metals-we-mined-in-2021-visualized/.17.“Net-ZeroSteelInitiative”,MissionPossiblePartnership,n.d.,https://missionpossiblepartnership.org/action-sectors/steel/.18.“Heating”,IEA,July2023,https://www.iea.org/energy-system/buildings/heating.19.Egedorf,S.,H.R.Shaker,R.MartinandB.Jørgensen,“Adverseconditionandcriticaleventpredictionincommercialbuildings:Danishcasestudy”,EnergyInformatics,vol.1,no.10,14August2018.20.“Buildings”,IEA,July2023,https://www.iea.org/energy-system/buildings.21.GlobalAllianceforBuildingsandConstruction,GlobalABCRoadmapforBuildingsandConstruction:2020-2050-Towardsazero-emission,efficient,andresilientbuildingsandconstructionsector,2020,https://globalabc.org/sites/default/files/inline-files/GlobalABC_Roadmap_for_Buildings_and_Construction_2020-2050_3.pdf.22.Maduta,C.,G.Melica,D.D’AgostinoandP.Bertoldi,“Towardsadecarbonisedbuildingstockby2050:Themeaningandtheroleofzeroemissionbuildings(ZEBs)inEurope”,EnergyStrategyReviews,vol.44,no.101009,2022.23.Bozdağ,Ö.andM.Seçer,“EnergyconsumptionofRCbuildingsduringtheirlifecycle”,SustainableConstruction,2007.24.Caminiti,S.,“HealthybuildingscanhelpstopCovid-19spreadandboostworkerproductivity,”CNBC:WorkforceWire,6November2021.25.IEA,EnergyEfficiency2020,2020.26.CaliforniaAlternativeEnergy&AdvancedTransportationFinancingAuthority,CaliforniaHubforEnergyEfficiencyFinancing,2021,https://www.treasurer.ca.gov/caeatfa/cheef/statusupdate/031921.pdf.27.“GreenLeasing”,GreenLeaseLeaders,n.d.,https://greenleaseleaders.com/green-leasing/.28.G20EnergyEfficiencyFinanceTaskGroup,G20EnergyEfficiencyInvestmentToolkit,2017.TransformingEnergyDemand4429.SchneiderElectric,TowardsNet-ZeroBuildings:Aquantitativestudy,2022,https://download.schneider-electric.com/files?p_Doc_Ref=Towards_Net_Zero_Buildings.30.Pandey,A.,“Aregreenbuildingsexpensivealternativestotraditionalstructures?”TheEconomicTimes,2023,https://economictimes.indiatimes.com/small-biz/sustainability/are-green-buildings-expensive-alternatives-to-traditional-structures/articleshow/102340836.cms.31.Valle,Giovanni,“AreGreenBuildingsMoreExpensive?”,BuilderSpace,5May2022,https://www.builderspace.com/are-green-buildings-more-expensive.32.IEA,WorldEnergyOutlook2023,2023.33.Ibid.34.Jaeger,Joel,“TheseCountriesAreAdoptingElectricVehiclestheFastest”,WorldResourcesInstitute,14September2023,https://www.wri.org/insights/countries-adopting-electric-vehicles-fastest.35.“AveragepriceanddrivingrangeofBEVs”,IEA,27May2020,https://www.iea.org/data-and-statistics/charts/average-price-and-driving-range-of-bevs-2010-2019.36.“Evolutionofaveragerangeofelectricvehiclesbypowertrain”,IEA,19May2022,https://www.iea.org/data-and-statistics/charts/evolution-of-average-range-of-electric-vehicles-by-powertrain-2010-2021.37.Kukreja,Balpreet,LifeCycleAnalysisofElectricVehicles,G.C.S.Program,https://sustain.ubc.ca/sites/default/files/2018-63%20Lifecycle%20Analysis%20of%20Electric%20Vehicles_Kukreja.pdf.38.“GlobalCO2emissionsintransportbymodeintheSustainableDevelopmentScenario,2000-2070”,IEA,2020,https://www.iea.org/data-and-statistics/charts/global-co2-emissions-in-transport-by-mode-in-the-sustainable-development-scenario-2000-2070.39.Fleming,GreggG.,IvandeLépinayandRogerSchaufele,AviationandEnvironmentalOutlook,InternationalCivilAviationOrganization,2022,https://www.icao.int/environmental-protection/Documents/EnvironmentalReports/2022/ENVReport2022_Art7.pdf.40.“UJALAYojana”,IndiaBrandEquityFoundation,https://www.ibef.org/government-schemes/ujala-yojna.41.G20,StrategicPlanforAdvancingEnergyEfficiencyAcrossDemandSectorsby2030,2023,https://www.g20.org/content/dam/gtwenty/gtwenty_new/document/etwg_docu/8_G20%20ETWG%20Presidency%20Document%20-%20A%20study%20on%20Strategic%20Plan%20for%20Advancing%20Energy%20Efficiency%20Across%20Demand%20Sectors%20by%202030.pdf.42.“CPUCExpandsOn-BillFinancingOptionsforNon-ResidentialEnergyUtilityCustomers”,PublicUtilitiesCommission,10August2023,https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-expands-on-bill-financing-options-for-non-residential-energy-utility-customers-2023.43.“Belgiangovernmentpuhseselectrificationofcompanycars”,Autovista24,1June2021,https://autovista24.autovistagroup.com/news/belgian-government-pushes-electrification-company-cars/#:~:text=ICE%20tax%2Ddeductibility%20phase%2Dout&text=Similarly%2C%20the%20100%25%20tax%20deduction,2030%20and%2067.5%25%20from%202031.TransformingEnergyDemand45TheWorldEconomicForum,committedtoimprovingthestateoftheworld,istheInternationalOrganizationforPublic-PrivateCooperation.TheForumengagestheforemostpolitical,businessandotherleadersofsocietytoshapeglobal,regionalandindustryagendas.WorldEconomicForum91–93routedelaCapiteCH-1223Cologny/GenevaSwitzerlandTel.:+41(0)228691212Fax:+41(0)227862744contact@weforum.orgwww.weforum.org
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