20221202 2022能效报告 IEA EnergyEfficiency2022VIP专享VIP免费

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Energy

Eiciency

2022

The IEA examines the

full spectrum

of energy issues

including oil, gas and

coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies that

will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries,

11 association countries

and beyond.

This publication and any

map included herein are

without prejudice to the

status of or sovereignty over

any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA.

International Energy Agency

Website: www.iea.org

IEA member

countries:

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European

Commission also

participates in the

work of the IEA

IEA association

countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Morocco

Singapore

South Africa

Thailand

Ukraine

INTERNATIONAL ENERGY

AGENCY

Energy Efficiency 2022 Abstract

PAGE | 3

I EA. CC BY 4.0.

Abstract

Energy Efficiency 2022 is the IEA’s primary annual analysis on global

developments in energy efficiency markets and policy. It explores recent trends in

energy intensity, demand and efficiency-related investment, innovation, policy and

technology while also discussing key questions facing policy makers.

This year record-high consumer energy bills and securing reliable access to

supply are urgent political and economic imperatives for almost all governments.

In response to the energy crisis countries are prioritising energy efficiency action

due to its ability to simultaneously meet affordability, supply security and climate

goals.

While efficiency investment has recently been increasing to reach new record

levels, the pace of global energy intensity improvements had noticeably slowed in

the second half of the last decade and virtually stalled during the first two years of

Covid-19. With efforts to better manage energy consumption as a result of the

crisis increasing the rate of improvement once more, the question as to whether

2022 will see a sustained efficiency turning point, and what more can be done, are

key themes of this year’s report.

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EnergyEfficiency2022TheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,11associationcountriesandbeyond.Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Source:IEA.InternationalEnergyAgencyWebsite:www.iea.orgIEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicSpainSwedenSwitzerlandRepublicofTürkiyeUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEAIEAassociationcountries:ArgentinaBrazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouthAfricaThailandUkraineINTERNATIONALENERGYAGENCYEnergyEfficiency2022AbstractPAGE3IEA.CCBY4.0.AbstractEnergyEfficiency2022istheIEA’sprimaryannualanalysisonglobaldevelopmentsinenergyefficiencymarketsandpolicy.Itexploresrecenttrendsinenergyintensity,demandandefficiency-relatedinvestment,innovation,policyandtechnologywhilealsodiscussingkeyquestionsfacingpolicymakers.Thisyearrecord-highconsumerenergybillsandsecuringreliableaccesstosupplyareurgentpoliticalandeconomicimperativesforalmostallgovernments.Inresponsetotheenergycrisiscountriesareprioritisingenergyefficiencyactionduetoitsabilitytosimultaneouslymeetaffordability,supplysecurityandclimategoals.Whileefficiencyinvestmenthasrecentlybeenincreasingtoreachnewrecordlevels,thepaceofglobalenergyintensityimprovementshadnoticeablyslowedinthesecondhalfofthelastdecadeandvirtuallystalledduringthefirsttwoyearsofCovid-19.Witheffortstobettermanageenergyconsumptionasaresultofthecrisisincreasingtherateofimprovementoncemore,thequestionastowhether2022willseeasustainedefficiencyturningpoint,andwhatmorecanbedone,arekeythemesofthisyear’sreport.EnergyEfficiency2022AcknowledgementsPAGE4IEA.CCBY4.0.AcknowledgementsEnergyEfficiency2022waspreparedbytheEnergyEfficiencyDivision(EEfD)oftheInternationalEnergyAgency(IEA)undertheleadershipofBrianMotherway,HeadofEEfD,andKevinLane,SeniorProgrammeManager.ThereportwasledandcoordinatedbyNicholasHowarth.OtherleadauthorswereJackMiller,EmmaMooney,KseniaPetrichenko,AlisonPridmore,CorneliaSchenk,andFabianVoswinkel.MajorcontributionsweremadebyConorGask,PaulineHenriot,OrestisKarampinis,NatalieKauf,SungjinOhandMonicaTroilo,alongwithAndikaAkbar,PaolaCajamarca,EdithBayer,EmiBertoli,ClaraCamasara,CelineGelis,ManuelPortillaPaveri,MatthieuPrin,VidaRozite,HugoSalamanca,MelanieSladeandSeoheeSong.DianeMunrocarriededitorialresponsibilityforthereport.KeisukeSadamori,DirectorofEnergyMarketsandSecurity(EMS),providedstrategicguidanceandinputtothiswork.Valuablecomments,feedbackandguidancewereprovidedbyotherseniormanagerswithintheIEAand,inparticular,LauraCozzi,TimGould,TimurGuelandNickJohnstone.DataandanalysisfromtheIEAEnergyDataCentrewerefundamentaltothereport,particularlyfromRobertaQuadrelli,DomenicoLattanzio,AlexandreBizeul,JungyuPark,ArnauRisquezMartin,PouyaTaghavi-Maghavi,PedroCarvalho,JuhaKöykkäandSuzyLeprince.AnalysisandinputfromtheIEAWorldEnergyOutlook,TrackingCleanEnergyProgress,WorldEnergyInvestment,EnergyTechnologyPerspectivesandSustainableRecoveryTrackerteamswasessentialtothiswork.ParticularthanksgotoDanielWetzel,AraceliFernandezPales,TimothyGoodson,MathildeHuismans,YannickMonschauer,ChiaraDelmastro,TiffanyVass,TanguyDeBienassis,JacobTeter,BlandineBarreauandLeonardoPaoli.OtherIEAcolleagueswhomadeimportantcontributionsinclude:Jean-BaptisteLeMarois,SimonBennett,SylviaBeyer,TorilBosoni,JoelCouse,RebeccaGaghen,GergelyMolnar,YasminaAbdelilha,JeremyMoorhouseandFrancoisBriens.ThanksalsogoestocolleaguesattheOECDDanielSanchezSerra,ArnaudBenoitandPierre-AlainPionner.ColleaguesattheEnergyEfficiencyHubwhoprovidedhelpfulcommentsandsupporttotheprojectincludedJonathanSintonandKristinaKlimovich.Otherhelpfulresearch,supportandadvicewasprovidedbyMitsidiProjetos,MariannePearsonandIanSkinner(TEPR),ThomasNowak(EHPA),IanHamilton,andProfessorAmoryLovins(StanfordUniversity).WewouldalsoliketorecogniseadviceandinputfromSimonBlack,KarlygashZhunussova,IanParry,DoraEnergyEfficiency2022AcknowledgementsPAGE5IEA.CCBY4.0.Iakova,PhilipBarrett,NateVernon,NicolasArreguiandJingZhoufromtheInternationalMonetaryFund.ThereportwouldnothavebeenpossiblewithoutJadMouawad,HeadoftheCommunicationsandDigitalOffice(CDO),andhisteamwhowereresponsibleforproductionandlaunchsupport,especiallyAstridDumond,TanyaDyhin,GraceGordon,JethroMullen,RobStone,IsabelleNonain-SemelinandThereseWalsh.ThereportwasmadepossiblebyassistancefromtheMinistryofEconomy,TradeandIndustry,Japan.PeerreviewersManyseniorgovernmentofficialsandinternationalexpertsprovidedinputandreviewedpreliminarydraftsofthereport.Theircommentsandsuggestionswereofgreatvalue.Theyinclude:RasmusKristensenDanfossAlexAblazaAsia-PacificESCOIndustryAlliancePeterBachDanishEnergyAgencyJefersonSoaresEnergyResearchOffice,BrazilMartinBornholdtDENEFFPaoloCeccheriniSignifyRobertDeeganDepartmentoftheEnvironment,ClimateandCommunications,IrelandSaurabhDiddiBureauofEnergyEfficiency,IndiaYaroslavDobrovolskiiSignifyLesleyDowlingDepartmentofIndustry,Science,EnergyandResources,AustraliaBilalDüzgünMinistryofEnergyandNaturalResources,TürkiyeLynetteDrayUniversityCollegeLondonChristineEganCLASPWolfgangEichammerFraunhoferInstituteforSystemsandInnovationResearch)MarkEllisMarkEllis&AssociatesStevenFawkesEnergyProAlessandroFedericiItalianNationalAgencyforNewTechnologies,EnergyandSustainableEconomicDevelopmentBrianFitzgeraldEnergyEfficiencyandConservationAuthority,NewZealandPeterFraserConsultantRobiGintingYouthrepresentativeEnergyEfficiency2022AcknowledgementsPAGE6IEA.CCBY4.0.TakashiHongoMitsui&Co.GlobalStrategicStudiesInstituteRodJansenEnergyinDemandHarryKennardUniversityofLondonGa-yonKimKoreaEnergyAgencyJuanIgnacioPermanentDelegationofSpaintotheOECDNetheLaursenDanishEnergyAgencySkipLaitnerAssociationforEnvironmentalStudiesandSciencesJarrodLeakA2E2HanaLeeKoreaEnergyAgencySorenLuetkenGlobalESCONetworkAlexandraMacielMinistryofMinesandEnergy,BrazilRobMurray-LeachEnergyEfficiencyCouncilVincentMinierSchneiderElectricDavidMorgadoAsianDevelopmentBankSteveNadelAmericanCouncilforanEnergy-EfficientEconomyChristianNollDENEFFHalilOruçMinistryofEnergyandNaturalResources,TürkiyeAlanPearsRMITUniversityTimoRitonummiMinistryofEconomicAffairsandEmployment,FinlandRikaSafrinaASEANCentreforEnergyChandanaSasidharanAEEEAshokSakarWorldBankYasuhiroSakumaMETIBarışSanliGovernmentofTürkiyeMarionSantiniRAPKoichiSasakiInstituteofEnergyEconomics,JapanAndreasScholtDataAheadJeremySungDepartmentofEnvironment,Land,WaterandPlanning,Victoria,AustraliaPeterSweatmanClimateStrategy&PartnersPradeepTharakanAsianDevelopmentBankSamuelThomasRAPMelissaTomassiniYouthrepresentativeSaraVadSørensenDanfossHarryVerhaarSignifyEviWahyuningsihConsultantEnergyEfficiency2022TableofcontentsPAGE7IEA.CCBY4.0.TableofcontentsExecutivesummary.............................................................................................................8Chapter1.Energyefficiencytrends................................................................................221.1Energyintensity..................................................................................................................221.2Energydemand..................................................................................................................261.3Financeandinvestment.....................................................................................................331.4Innovation...........................................................................................................................39Chapter2.Policyandtechnology....................................................................................442.1Nationalandinternationaldevelopments...........................................................................442.2Standardsandlabels.........................................................................................................512.3Market-basedinstruments..................................................................................................542.4Buildings.............................................................................................................................562.5Industry...............................................................................................................................602.6Transport............................................................................................................................652.7Systemlevelenergyefficiency...........................................................................................70Chapter3.Energyefficiencyandtheenergycrisis.......................................................763.1Reducingbillsandfightingenergypoverty........................................................................763.2Greaterconsumerawarenessandbehaviourchangetosaveenergy..............................883.3EnergysecurityandRussiangas......................................................................................923.4Strengtheningsupplychainsandskillsforfasterdeployment.........................................1043.5Meetingclimategoals......................................................................................................107Chapter4:SpecialfocusonenergyefficiencyinASEANcountries..........................1104.1OverviewofASEANenergyuse.....................................................................................1104.2Sectoralconsiderations....................................................................................................1124.3Raisingenergyefficiencyambition..................................................................................123Generalannex..................................................................................................................127Abbreviationsandacronyms..................................................................................................127Units.......................................................................................................................................128EnergyEfficiency2022ExecutivesummaryPAGE8IEA.CCBY4.0.ExecutivesummaryEfficiencyactionacceleratesascountriesmovetocontaineconomicpainfromtheenergycrisisTheunparalleledglobalenergycrisissparkedbytheRussianFederation’s(hereafter“Russia”)invasionofUkrainehasdramaticallyescalatedconcernsoverenergysecurityandtheinflationaryimpactofhigherenergypricesontheworld’seconomies.Loweringrecord-highconsumerbillsandsecuringreliableaccesstosupplyisacentralpoliticalandeconomicimperativeforalmostallgovernments.Whiletherearemanywaysforcountriestoaddressthecurrentcrisis,focusingonenergyefficiencyactionistheunambiguousfirstandbestresponsetosimultaneouslymeetaffordability,supplysecurityandclimategoals.Witheffortstoconserveandbettermanageenergyconsumptioninsharpfocussincetheonsetofthecrisis,efficiencyprogresshasgainedmomentum,withannualenergyintensityimprovementsexpectedtoreachabout2%in2022.Annualglobalprimaryenergyintensityimprovement,byscenario,2001-2022and2021-2030IEA.CCBY4.0.Note:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;andNZE=NetZeroEmissionsScenario.Globalenergydemandgrowthhasdeclinedsharplyandisexpectedtobecloseto1%thisyear.Thiscomesafterlastyear’s5%increase;oneofthelargestsingle-yearrisesin50years.0%1%2%3%4%5%2001-20102011-20152016-2019202020212022E2021-2030STEPS2021-2030APS2021-2030NZEPrimaryenergyintensityimprovementEnergyEfficiency2022ExecutivesummaryPAGE9IEA.CCBY4.0.Thisyear’simprovementinintensitycomesaftertheonsetofCovid-19ledtotwooftheworstyearseverforglobalenergyintensityprogress,withannualgainsfallingtoaroundhalfofonepercentagepointin2020and2021.Keyfactorsincludedahighershareofenergy-intensiveindustryinenergydemandandslowerefficiencyprogress,especiallyinthebuildingsandindustrialsectors.However,energyintensityprogresshadalreadyslowedbeforethestartoftheCovid-19pandemicin13oftheG20groupofcountriesandimprovedinonlyfour.From2010to2020,theglobalrateofimprovementfellfrom2%inthefirsthalfofthedecadeto1.3%inthesecondhalf.Thishighlightsthechallengeofre-acceleratingefficiencyprogresstothe4%neededeachyearto2030undertheIEANetZeroEmissionsby2050Scenario(NetZeroScenario).Withconsumersreducingenergyconsumptioninanefforttoreinincosts,thisyear’senergyintensityimprovementcannotentirelybeviewedasastepforward.Businessesareunderpressuretocloseorcurtailoperationsandmanypeopleacrosstheworldarestrugglingtoaffordbasicenergyneeds.Thenumberofpeoplewithoutreliableaccesstoheating,cooling,cleancookingandotherenergyserviceshasrisentoaround2.5billionworldwide,andanextra160millionhouseholdshavebeenpushedintoenergypovertysince2019.Highfossilfuelpricesaredrivingacost-of-livingcrisis,worseningenergypovertyandpublichealthEnergypriceinflationvariesacrosscountriesdependingonthefuelmix,thelevelofenergyefficiencyandthestructureoftheeconomy,aswellasgovernmentpolicessuchasfueltaxationandenergybillsupportstrategies.Whilethecurrentcrisisisglobal,itiscentredinEuropewherereducedenergysupplyfromRussiaisexposingconsumerstohigherenergybillsandrisksofsupplyshortagesoverthewinterheatingmonths.IntheEuropeanUnion,consumerenergypriceinflationfortheyeartoOctober2022increasedto39%,witharoundaquarterofhouseholdsestimatedtobelivinginenergypoverty.Vulnerablegroupsarethemostexposedandoftenliveinolder,poorer-qualitybuildings,usinglessefficientappliancesandoldervehicleswithlowerenergyperformancelevels.Thisnotonlymeanstheycanbepayingseveraltimesmoreforhouseholdenergybillsbutalsosuffercolder,damper,anddarkerlivingconditionswhichexacerbatehealthrisks.Thisyearhasalsoseenasignificantshiftbacktowardsusingcheapertraditionalbiomasssuchaswoodandcharcoalforheatingandcooking.Emerginganddevelopingeconomiesareparticularlyexposed.Around75millionpeoplewhohaverecentlygainedaccesstoelectricityareestimatedtohavelosttheabilitytopayforitand100millionpeoplemayneedtoswitchbacktousingtraditionalEnergyEfficiency2022ExecutivesummaryPAGE10IEA.CCBY4.0.stovesforcookingfromLPG.Thisposesaparticularhealthriskforwomenandchildrenwhoaremostexposedtohouseholdairpollutionfromcookingwhichintotalisestimatedtohavecontributedto2.5millionprematuredeathsthisyear.Year-on-yearchangeinenergypriceinflation,October2022IEA.Allrightsreserved.Source:OECDDatabaseonConsumerPriceIndices,asmodifiedbytheIEA.Well-targetedpublicspendingcansupportthevulnerableandenhanceefficiencyWithhouseholdsandbusinessesfacingsignificantlyhigherenergybillsthisyear,governmentsinallregionshavebroughtforwardarangeofinterventionstoprovidesupportforconsumers,includingneworincreasedbroad-basedfuelsubsidiesaswellasdirectcashpaymentstoassisthouseholds.ThevalueofthisemergencygovernmentspendingisnowoverUSD550billion.Inemerginganddevelopingeconomies,thisshort-termsupportnoweclipsesthatprovidedfor3581216171718191919202021212727272829293439444850535759606363711001370255075100125MexicoIsraelSpainCzechRepublicCanadaKoreaIcelandUnitedStatesSloveniaSlovakRepublicColombiaGreeceFranceSwitzerlandChileHungaryLuxembourgFinlandPortugalSwedenNorwayPolandEuropeanUnion–27…GermanyIrelandAustriaDenmarkLatviaUnitedKingdomEstoniaBelgiumLithuaniaItalyNetherlandsTürkiyePercentagechangeoverthesameperiodpreviousyearEnergyEfficiency2022ExecutivesummaryPAGE11IEA.CCBY4.0.cleanenergyinvestmentssinceMarch2020.Supportissettofurtherincreasesubstantially,suchasthroughaproposedpackageinGermanyofuptoUSD200billion.Inthetransportsectorthepercentageofenergypriceincreasesbeingpassedthroughtoconsumershasfallenacrossmanycountrieswiththedifferencebetweenmarketpricesandend-userpricesusuallybeingmetfrompublicbudgets.Proportionoftransportfuelpriceincreasespassedthroughtoconsumers,byregionIEA.CCBY4.0.Sources:BasedonIEAdataandtheIMF(2022),FiscalPolicyforMitigatingtheSocialImpactofHighEnergyandFoodPrices.Whileofferingimportantshort-termrelief,atthesametimeitisimportantsuchsupportdoesnotweakenincentivestoreduceenergywasteorslowtheswitchtolower-carbonsupply.Theleastefficientinterventionsarethosethatlowermarketpricesforenergythroughdirectfossilfuelconsumptionsubsidies,indiscriminatelyappliedtoallconsumers.Suchsubsidiesriskremovingtheincentivestoimproveefficiencyanddisproportionatelybenefitwealthierconsumerswhoarelargeenergyconsumers.TheIMFandtheOECDhavehighlightedtheneedtoscaledownsuchbroad-basedenergysubsidiesandshifttheirbalancetowardstargetedsupportforenergypovertyandstructuralenergyefficiencymeasures.Higherenergyefficiency,whichreducesenergyconsumption,alsoplaysanimportantroleinloweringtheoverallenergysubsidyburdenonpublicbudgetsinthelongerterm.0%20%40%60%80%100%High-incomeEconomiesLatinAmericaandCarribbeanEmergingandDevelopingAsiaEmergingandDevelopingEuropeSub-SaharanAfricaCaucasusandCentralAsia;MENA,AfghanistanandPakistan%ofenergypriceincreasepassedthroughtoconsumersDec20-Dec21,averagepassthroughJan22-Apr22,averagepassthroughEnergyEfficiency2022ExecutivesummaryPAGE12IEA.CCBY4.0.EnergyefficiencyspendingtopsUSD1trillion,equaltotwo-thirdsofallcleanenergyrecoverypackagesSince2020,governmentsworldwidehavehelpedmobilisearoundUSD1trillionforenergyefficiency-relatedactionssuchasbuildingretrofits,publictransportandinfrastructureprojects,andelectricvehiclesupport.ThisamountstoapproximatelyUSD250billionayearbeingdeployedfrom2020to2023,equivalenttotwo-thirdsoftotalcleanenergyrecoveryspending.ThisistheresultofUSD270billionofdirectpublicspendingbygovernments,whichisprojectedtomobiliseafurtherUSD740billionofprivateandotherpublicspending.Thisprovidesaproductivityboosttotheeconomyandcancontributetominimisingfutureenergy-relatedcost-of-livingpressuresthatmayarise.Globalspendingincleanenergyandrecovery,2020-2023IEA.CCBY4.0.Note:Mobilisedspendingincludesprivateandpublicspendingmobilisedbygovernmentaction.Source:TrackingSustainableRecoveries,asofApril2022.Globalefficiencyinvestmentisup16%,ledbyrecordgrowthinelectricvehiclesalesStrongconsumerspendingonnewfuel-efficientandelectriccarsisexpectedtohelpoverallenergyefficiency-relatedinvestmentriseby16%in2022,tojustoverUSD560billion.Undercurrentlystatedpolicies,thisfigureissettoincreaseafurther50%toalmostUSD840billionperyearfrom2026to2030.However,theselevelsarestillonlyabouthalfoftheenergyefficiency-relatedinvestmentlevelsneededinthesecondhalfofthisdecadetoalignwiththeNetZeroScenario.Globalefficiency-relatedtransportinvestmentisexpectedtorise47%in2022toUSD220billion.ThisincludesjustoverUSD90billiononelectrification,whichnowmakesupanestimated42%oftotalefficiency-relatedtransportinvestment,66%60%34%40%0200400600800100012001400GovernmentspendingMobilisedspendingUSDbillion2020-2023OthercleanenergyandsustainablerecoveryEnergyefficiency-relatedEnergyEfficiency2022ExecutivesummaryPAGE13IEA.CCBY4.0.comparedwithjust19%in2019.Growthinenergyefficiencyinvestmentforbuildingswasdownto2%thisyearcomparedwith12%theyearbeforeasconstructionactivityslowedandcostsrosesharplyfromhigherinterestratesandsupplychainpressuresonmaterialsandlabour.Globalenergyefficiency-relatedinvestment,byscenario,2015-2022andaverageannualinvestment,byscenario,2026-2030IEA.CCBY4.0.Source:WorldEnergyInvestment2022.Electricvehiclesaleshavealmostdoubledforthelasttwoyearsinarow,reachingaround11millionunitssoldworldwidein2022,upfromjust1millionin2017.Thismeansthatelectriccarsnowaccountfor13%ofnewvehiclesalesworldwide.Conventionalenergyefficiencyinvestmentinthetransportsectoralsoperformedstrongly,risingbyUSD33billionor35%,toUSD128billion,drivenbyinvestmentinmoreefficientvehicles.Despitethisrecordgrowth,thereisevidencethatsupplychainconstraintsarerestrictingevenfasterprogress.Thisrelatesparticularlytotheavailabilityofsemiconductorandlithiumprocessing.Longerwaitinglistsarenowwidespreadformanypopularnewelectricvehiclemodelsandthepricesofsecond-handelectricvehiclesareincreasing.EnergysavingsfrompastefficiencyactionsareloweringenergybillsbyUSD680billionthisyearinIEAcountriesWithconsumerenergyexpendituresstronglyrisingthisyearinmostcountries,thevalueofimprovingenergyefficiencyinreducingcostsandsavingenergyhasrisenexponentially.Efficiencygainswillhelpmitigatefinancialhardshipforresidentialconsumersandprovidecriticalcostsavingsforcommercialusersstrugglingina025050075020152016201720182019202020212022EBillionUSD(2021)Industry(energyefficiency)Industry(electrificationandenduse)Buildings(energyefficiency)Buildings(electrificationandenduse)Transport(energyefficiency)Transport(electrification)025050075010001250150017502026-30STEPS2026-30NZEEnergyEfficiency2022ExecutivesummaryPAGE14IEA.CCBY4.0.weakerglobaleconomy.But,toachievethesegoals,itisessentialthatpolicymakersadoptwell-targetedandbroadsetsofenergyefficiencymeasures.Overthelast20years,IEAmembercountrieshaveimplementedenergyefficiency-relatedmeasuresacrossthebuildings,industryandtransportsectorsthatareestimatedtobesavinghouseholdsandbusinessesaroundUSD680billionthisyear,oraround15%ofthetotal2022energybillofUSD4.5trillion.Thisreflectsend-useenergypricesforfuelsinIEAcountriesthisyearand24EJofavoidedenergydemandfromefficiency-relatedmeasures.Changeinenergydemandanddrivers,inIEAcountries,2000-2020IEA.CCBY4.0.Source:EnergyEfficiencyIndicators2022.TheaccumulatedeffectsofefficiencyhavebeensolargethatfinalenergydemandforIEAcountriesasagrouphasremainedrelativelysteadyatabout140EJfor20years.Thiswasachievedevenastheeconomiesofthegroupgrewby40%inrealtermsandoveralleconomicstructureonlyslightlyshiftedtowardslessenergy-intensiveactivities.Strongerefficiencyisthefirst-bestpolicytobringdownenergybillsThereisawiderangeofenergyefficiencyperformancelevelsinhomes,offices,businessesandvehicles.Forexample,evidencesuggeststhatthereductioninrunningcostsbetweenthemostefficientandleastefficienthomesorcarscanbecommonlyasmuchas40%andupto75%dependingontheinitiallevelofefficiency.Thismeansthatitcancostsomeconsumerstwooreventhreetimesmoretoheatthesameareaortravelthesamedistance.Variationsinenergyefficiencyexistbothwithinandamongcountries.Forexample,insomeEuropeancountrieswithsimilarclimatesitcantaketwiceasmuchenergytoheatthesamefloorareaorwithinonecountrytheenergy-20%-15%-10%-5%0%5%10%15%20%25%20002002200420062008201020122014201620182020ChangeinenergydemandTotalfinalenergyconsumptionActivityEfficiencyStructureEnergyEfficiency2022ExecutivesummaryPAGE15IEA.CCBY4.0.consumedbetweenthemostefficientandleastefficienthomesforagivensizecanvarybyafactorofuptothree.Typicalannualhouseholdenergybillsbybuildingenergyperformancecertificaterating,intheUnitedKingdomatsummer2019andOctober2022pricesIEA.CCBY4.0.Sources:IEAanalysisofdatafromUKDepartmentforBusiness,EnergyandIndustrialStrategy.Fortransport,thedifferencesinvehicleage,efficiencylevels,sizeandfueltypehaveamajorimpactonannualfuelbills,asdoesthechoiceoftravelmode.Forexample,themostefficientvehiclesofthesamesizeandweightusearoundhalftheenergyofthesametypeofvehiclepurchasedtenyearsago.AnalysisofpersonalvehiclesinEuropesuggestsanewcompactelectriccarisbyfarthecheapestvehicletorun,withtypicalannualenergycostsaroundhalfthatofthemostefficientnewnon-EVcompactcar.FuelbillsfordifferentpersonalvehicletypesinEurope,June2021-June2022IEA.CCBY4.0.010002000300040005000600070008000GFEDCBAverageannualenergybill(USD)EfficiencyratingAnnualbillatsummer2019priceIncreaseinbill2019-2205001000150020002500300010year-oldbest-sellingBest-selling202110year-oldbestsellingBest-selling2021Mostefficient10year-oldbest-sellingBest-selling2021MostefficientCompactEVCrossoverSUV(petrol)Medium-sizedcar(petrol)Compactcar(petrol)Indicative12-monthfuelbill(USD)BillincreaseusingJune2022fuelpriceBillusingJune2021fuelpriceEnergyEfficiency2022ExecutivesummaryPAGE16IEA.CCBY4.0.MoreefficientbuildingswillplayakeyroleinenablingEuropetoachieveindependencefromRussiangasNaturalgasisthemostcommonfuelcurrentlyusedgloballyforresidentialheating,accountingfor42%or760bcmofheatingenergyneeds.WithinEurope,gasdependencyforheatingrangesfromover80%intheNetherlandstoalmosttotalindependenceinsomecountriessuchasNorwayandSweden.Asaconsequenceofthecurrentenergycrisis,theshareofRussiangasintotalEuropeandemandhasfallenfrom47%in2019toaround9%in2022.Thislossofsupplyhasprecipitatedanacuteenergysecuritycrisis,giventhelimitedavailabilityofalternativeaffordablenaturalgas,andhasbroughtintofocusthepressingneedforgreaterdiversificationofsupplysourcesandroutes.InmostcountriesacrossEurope,thepriceofgasrelativetoelectricityforhouseholdshasrisensignificantly.Thishasdramaticallychangedtheeconomicsofheating.Forexample,inDenmark,thecostofoperatingagasheatingsystemhasrisenforanaveragehouseholdbyaround330%whereasthecosttoheatthesamespacewithanelectricheatpumphasrisenbyaround100%.WhilerelativepricesvaryacrossEurope,efficientelectricheatpumpsarenowtheclearleaderwhenitcomestotheoperatingcostsofheatingmostbuildings.Agrowingnumberofcountriesandsub-nationalgovernmentshavelegislationunderwayproposingbansorphase-outschedulesforgasandoilheatingappliances.AcrosstheEuropeanUnionandtheUnitedKingdomsevencountriesaccountingfor80%ofresidentialgasuseintheregionplantobannewgasheatingconnections.EnergyEfficiency2022ExecutivesummaryPAGE17IEA.CCBY4.0.Proportionofresidentialheatingenergyconsumptionbyfuelsourceinselectedcountries,2020IEA.CCBY4.0.Source:EnergyEfficiencyIndicators2022.Forexample,Germanyplanstoputinplaceanimplicitbanonnewfossilfuelheatingfrom2024,whenallnewly-installedheatingsystemsmustbesuppliedbyatleast65%renewableenergy.Franceplanstobannewgasconnectionstobuildingsfrom2023,Austriaintendstoimplementabanfrom2023andtheNetherlandswillrequireheatpumpinstallationsorheatnetworkconnectionsinbuildingsfrom2026.TheUnitedKingdomhasannouncedplanstoprohibitnewgasheatingsystemsandboilersby2025,andbanthemforallbuildingsby2035.IntheUnitedStates,asmallnumberofstateshavelegislationunderwayproposingbansonnewfossilfuelheating.InSeptember2022Californiamovedtobringinregulationswhichprohibitsalesofgas-poweredspaceandwaterheatersfrom2030.Over60citiesinCaliforniahavealreadyannouncedbansorareactivelydiscouraginggasuseinbuildings.Oregonalreadyoutlawednatural0%10%20%30%40%50%60%70%80%90%100%NorwaySwedenFinlandChileEstoniaNewZealandJapanPolandGreeceDenmarkIrelandSpainCzechRepublicAustriaBelarusFranceBelgiumGermanyCanadaUkraineAustraliaHungaryKoreaItalyUnitedStatesUnitedKingdomNetherlandsArgentinaPercentofspaceheatingGasOilCoalHeatBiofuelsandwasteElectricityOtherEnergyEfficiency2022ExecutivesummaryPAGE18IEA.CCBY4.0.gasuseinanynewconstructionsince2021.InCanada,thecityofVancouverandtheprovinceofQuebecalsohaveplanstobanhotwatersystemspoweredbyfossilfuels.ThelargestenergyefficiencyopportunitiesofthefuturewillbefoundinemerginganddevelopingcountriesEmergingmarketanddevelopingeconomies(EMDEs)togetheraccountforaround260EJor60%ofglobalfinalenergydemand.Whiletherateisslowinginmanycountries,undercurrentpolicysettingsfinalenergydemandby2030isexpectedtogrowalmost20%toaround305EJ.ThiswillincreaseEMDEs’globalshareby5%asenergydemandinadvancedeconomiesisexpectedtostayrelativelysteady.Percentageofchangeinannualaveragefinalenergydemandinselectedemergingmarketanddevelopingeconomiescountries,2000-2019IEA.CCBY4.0.BehindthisenergygrowthstoryisariseinenergyconsumptionperpersoninEMDEsasincomesgrow.Forexample,anaveragepersoninanEMDEcurrentlyusesthreetimeslessenergyintheirhomeandfourtimeslessenergyfortransport,comparedwithanaveragepersoninanadvancedeconomy.Withemergingcountriesaccountingforanever-greatershareofenergydemand,thelargestenergyefficiencyopportunitieswillincreasinglybefoundinsuchcountriesasBrazil,thePeople’sRepublicofChina(hereafter“China”),India,Indonesia,MexicoandSouthAfrica.Giventheircriticalimportancetoglobalenergysecurityandclimategoals,theIEAcollaborateswiththesecountriesandothersinAfrica,theASEANandLatinAmericanregionstosupportenergyefficiencythroughitsEnergyEfficiencyinEmergingEconomies(E4)programme.0%5%10%AfricaASEANBrazilChinaIndiaIndonesiaMexicoSouthAfricaAnnualaveragefinalenergydemand%change2000-20102011-2019EnergyEfficiency2022ExecutivesummaryPAGE19IEA.CCBY4.0.HistoricmomentforinternationalcooperationonefficiencytohelpsecureaffordablecleanenergyNotsincethefoundingoftheIEAin1974hastheneedforacoordinatedeffortonenergyefficiencytoreducewastefulandinefficientuseofenergybeensogreat.Nootherenergyresourcecancomparewithenergyefficiencyasasolutiontotheenergyaffordability,securityofsupplyandclimatechangecrises.ThisiswhytheIEAcallsenergyefficiencythe“firstfuel”ofallenergytransitions.InJune2022,theIEAheldits7thAnnualGlobalConferenceonEnergyEfficiencyinSønderborg,Denmark.Thiswasthelargestevergatheringofministersfromcountriesaroundtheworldtospecificallydiscussthevalueofstrongeractiononenergyefficiency.Attheconference26governmentsissuedajointstatement“callingonallgovernments,industry,enterprisesandstakeholderstostrengthentheiractiononenergyefficiency”andwelcomingtheSønderborgActionPlanonEnergyEfficiency.ThisplanoutlinesasetofstrategicprinciplesandpolicytoolkitsdevelopedbytheIEAthatcanhelpgovernmentsimplementefficiencypoliciesrapidly.PolicypackageapproachtostrengtheningenergyefficiencyIEA.CCBY4.0.Is2022likelytobeaturningpointforenergyefficiency?Akeyquestionforpolicymakersrightnowiswhethertheenergycrisiswillbringaboutaglobalturningpointforacceleratingmuch-neededenergyefficiencyprogressoverthisdecadefollowingtherecentweakperformance.Thestepupinenergyintensityimprovementsfromlessthanhalfapercentagepointduringeachoftheprevioustwoyearstoalmost2%in2022isencouraging,thoughweaker-EnergyEfficiency2022ExecutivesummaryPAGE20IEA.CCBY4.0.than-expectedeconomicgrowthorhigherenergyconsumptioncouldstillseethisfigurereducedby0.3%.Itisalsoonlyhalfofthe4%ofannualintensityimprovementsneeded,onaverage,overthisdecadetoalignwiththeNetZeroScenario.Andwhiletherearecausesforoptimism,significantheadwindstofasterprogressremain.Contributingforcestowhy2022couldbeaturningpointforenergyefficiencyIEA.CCBY4.0.Theeventsof2022havenonethelesschangedthedynamicsofenergymarketsfordecadestocome.Inthewakeofthesedisruptions,energyefficiencyhasreceivedaseriesofmajorglobalboosts:•Globalenergyefficiencyinvestmentisincreasingfast,withgovernments,industryandhouseholdsinvestingUSD560billionthisyear,whichisanewrecord.•Energyefficiency-relatedspendingismakinguptwo-thirdsofallcleanenergyandrecoveryspending,withUSD1trillionmobilisedsince2020.Atleast16highprofilenationalplansaredrivingthisprogressonefficiency,includingtheUSInflationReductionAct,theREPowerEUPlanandJapan’sGreenTransformation(GX)Initiative.EnergyEfficiency2022ExecutivesummaryPAGE21IEA.CCBY4.0.•Arisingwaveofenergysavingawarenesscampaignsishelpingmillionsofcitizensbettermanageenergyuseandmakeefficiency-relateddecisions.•Existingbuildingcodesarebeingstrengthenedandnewonesarebeingintroducedinemerginganddevelopingcountries.Coolingstrategiesarebeingintroducedinregionswiththefastest-growingdemandforairconditioning.•Theelectrificationoftransportandheatinglookstohavereachedaturningpoint.Oneineveryeightcarssoldgloballyisnowelectric,whilealmost3millionheatpumpsweresoldin2022inEuropealoneastheybecomethepreferredheatingoption.•Thevaluethatenergyefficiencybringstoconsumersincreaseddramaticallythisyeargivensharplyhigherprices.Whileenergycost-of-livingpressureshaverisenconsiderably,efficiencyactionsimplementedoverthelast20yearsarenowsavingconsumersinIEAcountriesUSD680billionofftheirenergybillsthisyearatcurrentprices.Despitethesewelcomecausesforoptimismseveralbarrierstofasterprogressremain:•Therehasbeenamassivescale-upoffossilfuelsubsidiesasgovernmentsseektocushiontheimpactofhigherenergypricesonhouseholdbills.OverUSD550billionoftemporarysupporthasbeenaddedoverthelastyear.Ifsupportisnotwelltargeted,thiscouldweakenthecaseforenergyefficiency.•Energyefficiencyinvestmentishighlyconcentratedinadvancedeconomies.Ifglobalefficiencyimprovementsaretoaccelerate,investmentandpolicescoveringtheother60%ofenergyconsumptioninEMDEsmustbestrengthened.•TheCovid-19crisissawashifttowardsmoreenergy-intensiveindustry.Energyefficiencyprogresswillcontinuetobestymiedifstrongindustrialdemandforenergypersistswithoutamajorimprovementinindustrialenergyefficiency.•Muchoftheenergydemandreductionthathastakenplacemaybeanegativeconsequenceofslowingbusiness,orconsumersforgoingenergyservicestosavemoney.Short-termeffortstosaveenergycaneasilyrevertbacktopastpatternsofbehaviouroncethecrisiseases.Inthemidstofaglobalpolycrisis,energyefficiency’sroleasthe“firstfuel”hasbeenunderscoredbyitsabilitytosimultaneouslymeetenergyaffordability,securityandclimategoals.Efficiencyactionsreduceoverallenergydemand,puttingdownwardpressureonenergypricesandCO2emissions,generatingemploymentandloweringbillsforconsumers.Theconditionsareinplacefor2022tobecomeaturningpointyearforenergyefficiencyprogress.Governmentsworldwideareactingtostrengthentheireconomies,helpingstrugglingcitizensandboostingbusinessesthroughenergyefficiencyaction.Buttocapitaliseonthisopportunityandaccelerateprogress,itwillbecrucialthattheycontinuetoputinplacemoretargeted,sustainedandbroadersetsofmeasures.EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE22IEA.CCBY4.0.Chapter1.Energyefficiencytrends1.1EnergyintensityEnergycrisismayresetthegrowthtrajectoryforefficiencygainsafteryearsofslowprogressTheenergyintensityoftheglobaleconomy-akeymeasureoftheenergyefficiencyoftheeconomy-isexpectedtoimprovebyalmost2%in2022followingtwoyearsofstalledprogress.Surgingenergycosts,supplydisruptionsandloomingshortageshavesharpenedthefocusonimprovingefficiency,withconsumersandgovernmentsaroundtheworldurgentlyimplementingmeasuresandadoptingnewpoliciestoconserveandbettermanageenergyconsumption.Whilethisyear’simprovementinenergyintensityisasignificantstepupfromthelasttwoyears,recenttrendsarestillfarofftrackfromachievingthe4%perannumneeded,onaverage,from2020to2030tocorrespondwiththepathwayoutlinedintheNetZeroScenario.Toachievenetzeroemissions,thelinkbetweeneconomicgrowthandever-risingenergyconsumptionmustbebroken.Annualchangeinglobalprimaryenergyintensity,2011-2022andbyscenario,2021-2030IEA.CCBY4.0.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario.PrimaryenergyintensityimprovementisthepercentagedecreaseintheratioofglobaltotalenergysupplyperunitofGDP.GDPgrowthof3.2%isassumedfor2022basedonthelatestIMFforecast.However,iffinalestimatesareloweredto2.8%thenintensityimprovementsof1.7%wouldresult,otherthingsremainingequal.0%1%2%3%4%5%2001-20102011-20152016-2019202020212022E2021-2030STEPS2021-2030APS2021-2030NZEPrimaryenergyintensityimprovementEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE23IEA.CCBY4.0.Globalenergydemandgrowthisexpectedtomoderatesignificantlyin2022,toaround1%,whileanincreasinglygloomyanduncertaineconomicenvironmenthasloweredexpectationsforGDPgrowthfromaround5%to3.2%overtheyear.Ifgrowthweakensfurther,thiscouldbringdownenergyintensityimprovementsto1.7%,otherthingsremainingequal.Withpeopleandbusinessescuttingbackconsumptioninanefforttoreinincostsandmeethouseholdbudgets,cautionalsoneedstobegiventointerpretingthisyear’senergyintensityimprovementasastepforward.Householdsarecurtailingenergyuse,whilstmanybusinessesareunderpressuretoreduceoutputorcloseduetohighfuelprices.Emergingeconomiesareparticularlyexposed.Forexample,around75millionpeoplewhohaverecentlygainedaccesstoelectricityhavenowlosttheabilitytopayforit.Overall,Covid-19hasprovedasignificantheadwindtoglobalenergyintensityimprovement.Ashifttowardsmoreenergy-intensiveactivitiesin2020andastronger-than-expectedreboundinenergyconsumptionin2021werebehindtheslowdown,withtheannualrateofimprovementfallingtoabout0.5%inboththeseyears.Previousexpectationsofareturntotheten-yearaverageimprovementsof1.9%in2021werenotrealised,asarobustpost-Covidrecoveryledtothelargestannualriseinenergyconsumptionin50years,whichsawparticularlystronggrowthinenergy-intensiveindustries.Takingalonger-termview,progressmadeonefficiencygloballyoverthelastdecadewasmorepositive.Forexample,annualaverageintensityimprovementsofabout1%over2001-10deliveredaround3GtofCO2reductionscomparedwithwhatwouldhavebeenthecasewithoutanyimprovement.Buildingonthis,a1.7%averageimprovementover2011-2020delivereda6Gtreductionby2020.ThisdoublingoftheCO2reductionsfromintensityimprovementshelpedoffsetalmosthalfthetotalextraemissionsthatwouldhavematerialisedasaresultofglobalpopulationandincomegrowth.Withouttheseintensityimprovementsover2000-2020,emissionsandenergyconsumptionwouldbearound30%higher,withannualsavingsof9GtCO2and125EJatthestartofthisdecade.Anaccelerationofenergyintensityimprovementsbasedonthe2%rateassumedintheStatedPoliciesScenario(STEPS)to4%peryearconsistentwiththeNetZeroScenariowouldavoid95EJperyearofenergyconsumptionin2030.Thiswouldaddanextra5GtofCO2reductionsabovewhatwouldbeachievedinSTEPSbythen.Assumingemissionsreductionsofaround6Gtperyearfroma2%annualintensityimprovementover2020-2030andtheadded5Gtperyearfromachieving4%intheNetZeroScenario,totalCO2emissionsreductionsfromintensityEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE24IEA.CCBY4.0.improvementscouldbeashighas11Gtby2030.Thisisalmostone-thirdofcurrentannualemissionsfromfuelcombustion.GlobalCO2emissionsfromfuelcombustionanddrivers,2000-2020IEA.CCBY4.0.Note:From2019to2020globalCO2emissionsfellbyaround2GtCO2duetolowereconomicactivitybroughtaboutbytheCovid-19pandemic.Efficiencyprogressslowedin13G20countriesinthesecondhalfofthelastdecadeandimprovedinfourAtthecountrylevel,afewmajorenergyconsumingcountrieshavethepotentialtoshifttheneedleonenergyefficiencyprogress.Thereisawidespectrumofenergyintensityamongcountriesdependingontheeconomicstructure,energyprices,climate,andothersocialandpoliticalfactors.Forexample,RussiarequiresalmostfourtimesasmuchenergytoproducethesamevalueofGDPcomparedwiththeUnitedKingdom.During2020and2021energyintensityprogressfluctuatedwildlyatthecountrylevel,whichreflectedtheimpactofthepandemicandtheattendingeconomicdisruptionandrebound.Thismeansaclearerviewofprogresscanbeseenfromobservinglonger-termtrends.Forexample,from2015to2020thecountrieswiththelargestannualenergyintensityimprovementsweretheUnitedKingdomat2.8%peryear,Franceat2.6%,Germany,theUnitedStatesandChinaat2.5%andIndiaat2.4%.0510152025303540452000emissionsPopulationGDPpercapitaEnergyintensity(TES/GDP)Carbonintensity(CO2/TES)2010emissionsPopulationGDPpercapitaEnergyintensity(TES/GDP)Carbonintensity(CO2/TES)2020emissionsGtCO2PopulationGDPpercapitaCarbonintensity(CO2/TES)Energyintensity(TES/GDP)EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE25IEA.CCBY4.0.Whileoveralltheglobalrateofenergyintensityimprovementdeceleratedfrom2.2%over2010-15to1.4%over2015-2020,fourcountriesmanagedtoaccelerateprogress.Francemovedupfrom1.8%peryearin2010-15to2.6%in2015-2020andKoreaacceleratedfrom1.3%to1.8%overthesameperiod.Brazilstagedaturnaroundinthesecondhalfofthedecade,fromaneconomythatwasbecomingmoreenergyintensiveatarateof1%peryearfrom2010to2015,toonewhereenergyintensitystabilised,improvingslightlyby0.2%peryearfrom2015to2020.InAsia,someoftheworld’sfastestimprovingcountriesmoderatedmarkedlyinthesecondhalfofthelastdecade.Comparing2010-2015to2015-2020,China’sstrongprogressof4.2%perannummoderatedto2.5%,Indonesiafellfrom5.2%peryearto0.9%,Japanslowedfrom3.9%peryearto2%,andAustraliadroppedfrom2.8%to0.8%overtheperiod.OthernotableslowdownsoccurredinEurope,withtheEU-27showingannualimprovementdeceleratingfrom2.6%peryearover2010-2015to2%over2015-2020.Forindividualcountries,theUnitedKingdomdroppedbackfrom4.3%to2.8%peryear,Germanyeasedfrom2.9%to2.5%andItalyfrom1.9%to1%.Primaryenergyintensity,inG20countries,2020,andannualimprovement,2010-2021IEA.CCBY4.0.Note:2021datanotyetavailableforSouthAfrica,SaudiArabia,China,India,andIndonesia.GlobalrateofprogressneeddintheIEANetZeroScenarioGlobalrateofprogressneeddintheIEANetZeroScenario-2%0%2%4%6%Annualimprovement2010-20152015-20200510RussiaCanadaSouthAfricaSaudiArabiaChinaKoreaWorldG20AustraliaUnitedStatesIndiaArgentinaBrazilFranceMexicoJapanEU-27IndonesiaGermanyItalyTürkiyeUnitedKingdomMJper(USD2015PPP)Ru…EnergyIntensity20202020-6%-4%-2%0%2%4%6%Annualimprovement2019-20202020-20211-yearannualenergyintensityimprovement5-yearaverageannualenergyintensityimprovementsEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE26IEA.CCBY4.0.EfficiencyprogressisslowinginthebuildingsandindustrialsectorsFrom2015to2020,theaverageimprovementsofenergyperunitoffloorspaceofresidentialbuildingswere0.5%peryearcomparedwithhistoricalratesofbetween1.5%and2%.Inindustry,therateofimprovementintheenergyneededtoproduceoneUSdollarofindustrialvalueaddeddroppedbackfromalmost2%peryearachievedover2010-15tojustunder1%over2015-2020.Onlyinthetransportsectorwasenergyefficiencyprogressrelativelysteadyfrom2010to2020,withenergyperpassengerkilometretravelledforlight-dutyvehiclesdeclining(thatisimproving)by2%onaverage.Globalfinalenergyintensityimprovement,bysector,2000-2021,andintheNetZeroScenario,2030IEA.CCBY4.0.Note:Transport=Light-DutyVehicles(LDV).1.2EnergydemandRisingenergycostsareputtinggreaterpressureonconsumersandbusinessesIthasbeenayearofrecordhighsinglobalenergypricesfor2022.ByJanuary,naturalgas,oilandelectricitypriceshadbeenrisingformorethan12monthsasaresultofthepost-Covidrecovery,aseriesofextremeweathereventsandunplannedsupplyoutages.FromtheendofFebruary,Russia’sinvasionofUkrainebroughtaboutthemostsignificantglobalenergypriceshocksincethe1970s.-4%-2%0%2%4%6%2000-20102011-20152016-2019202020212030NZE2000-20102011-20152016-2019202020212030NZE2000-20102011-20152016-2019202020212030NZE2000-20102011-20152016-2019202020212030NZEFinalenergydemand(TFCperGDP)Residential(MJperm²)Industry(MJpervalueadded)Transport(LDV)(MJperpassengerkm)Annualimprovement(%change)EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE27IEA.CCBY4.0.WhileEuropehasbeenatitscentre,theeffectsofthecrisishavebeenfeltacrosstheworld.Inearly2022,spotpricesfornaturalgasinEuropeandAsiaweremorethanfiveandsixtimesthoseinNovember2019.ByAugust2022,theyreachedUSD94/MMBtuinEuropeandUSD67/MMBtuinAsia–thehighesteverrecordedinEurope–andan18-foldand12-foldincreasesinceNovember2019,respectively.Sincesummer,energypriceshaverecededfromtheserecordpeaks,butremainatlevelsseveraltimeshigherthaninlate2019.Risingpricesforoil,coalandgasalsofedintohigherend-useprices,thoughthisdifferssignificantlyamongcountriesdependingonthefuelmix,accesstolong-termcontracts,taxation,USDexchangeratesandgovernmentpolicies.Steepenergycostsarealsorunningthroughsupplychainsforcleanenergy,includingefficiency.Higherpricesforkeymaterialssuchassteel,copper,timber,chemicalsandplasticsareputtingupwardpressureonthecostsofbuildingconstruction,manufacturing,efficiency-relatedequipment,andheatpumps,amongmanyotherproducts.InEuropeandNorthAmerica,theenergypricereductionsofrecentmonthshavenotyetbeenpassedthroughintolowerconstructioncosts.Keyenergypriceandconstructioncostindices,November2019-2022IEA.CCBY4.0.Sources:IEA(gasandoilspotpricedata);ArgusMediaLtd(coalpricedata);NationalBureauofStatisticsofChina,Ex-factorypriceindexofindustrialproducts;Eurostat,Constructioncost(producerprices),newresidentialbuildings–quarterlydata;UnitedStatesCensusBureau,ConstructionPriceIndices.020040060080010001200Nov2019Nov2020Nov2021Nov2022Index(100=Nov2019)CoalandoilpricesNewcastleFOBCoalWTICrude90100110120130140150Nov2019Nov2020Nov2021Nov2022ConstructioncostsChinaEuropeanUnionUnitedStates020040060080010001200Nov2019Nov2020Nov2021Nov2022GaspriceAsianspotLNGTTF(Europe)HenryHubEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE28IEA.CCBY4.0.Energydemandgrowthmoderatesin2022afteroneofthelargestsingle-yearrisesin50yearsGlobalenergydemandgrowthisexpectedtoslowtoaround1%in2022aseconomicgrowthmoderatesto3.2%amidamoregloomyanduncertainoutlookwithestimatesaslowas2.8%stillquitepossible.Previousexpectationsofarecoveryinenergyintensityperformanceto1.9%in2021didnotmaterialiseastheeconomicrecoveryfromCovid-19wasfuelledbyoneofthelargestincreasesinenergyconsumptionin50years.Ariseof5.4%inenergydemandin2021to440EJmorethanoffsetthe4.1%fallexperiencedin2020,andalsodelivereda2Gtincreaseinenergy-relatedCO2emissionstoover36GtCO2,thelargestannualgaininhistory.Thiswasdrivenbyareboundinglobaleconomicgrowthtoabove6%in2021followingacontractionof3%in2020duetoCovid-19.Economicgrowthinemergingmarketanddevelopingeconomieswasalmost7%in2021comparedwitharound5%inadvancedeconomies.Thisfollowedacontractionof2%inEMDEsand4.5%inadvancedeconomiesin2020.Chinahadparticularlyrobustgrowthduringthepandemic,withannualGDParound2%in2020and8%in2021.Changeinglobalenergyconsumption,bysector,2000-2021IEA.CCBY4.0.Bysector,energyconsumptioninbuildingsrosebyfivetimesmorein2021thanitfellin2020duetoCovid-19,increasing4%comparedwithafallof1%theyearpreviously.Whilespaceandwaterheatingarethelargestenergyconsumersinbuildings,responsibleforalmosthalfofenergydemand,spacecoolingisexperiencingthefastestgrowth,up6.5%in2021,comparedwiththeyearbefore.-15%-10%-5%0%5%10%2000-20102011-20152016-2019202020212000-20102011-20152016-2019202020212000-20102011-20152016-2019202020212000-20102011-20152016-201920202021TFCIndustryBuildingsTranportAnnualchangeEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE29IEA.CCBY4.0.Transportenergydemandisrecoveringbutstillbelowpre-Covidlevels.However,inabsoluteterms,transportaccountedforthelargestincreaseinenergydemandfor2021,addingaround8EJor8%,followingacollapseof16EJor14%in2020.EfficiencyprogresshasmorethanhalvedthepotentialgrowthinglobalenergydemandoverthelastsixyearsEnergysavingsfromefficiencygainsandchangesinthefuelmix,includinggreateruseofelectricityforheatingandtransport,haveactedtogethertolowerglobalenergydemandby30EJfrom2016to2021,comparedwithwhatwouldhavebeenwithouttheseeffects.Thishelpedoffsetmorethanhalfoftheenergydemandgrowthfromincreasedeconomicactivity.RealGDProseby17%from2016to2021,which,combinedwithashifttowardsamoreenergy-intensiveeconomicstructure,putupwardpressureofaround54EJinenergydemand.Theneteffectofthesedriversmeantthatglobalfinalenergydemandfrom2016to2021onlyroseby24EJ,or6%,toaround440EJ.Withouttheenergysavingsfromefficiencygains,energydemandwouldhavegrown13%,toalmost470EJ.However,intheNetZeroScenario,globalfinalenergydemandfallstojustbelow400EJby2030,highlightingthemuchgreaterroleefficiencyneedstoplayinthecomingyears.Decompositionofchangeinglobaltotalfinalenergyconsumption(TFC),2016-2021IEA.CCBY4.0.38039040041042043044045046047048020162021Finalenergyconsumption(EJ)ActivityEconomicstructureFuelswitchingEnergyefficiencyTFCline1line2line3line4EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE30IEA.CCBY4.0.Despiterecentslowerprogress,efficiencyhasdeliveredmajorreductionsinenergyusewhileactivitylevelsroseOverthelasttwodecadesenergyefficiencyimprovementshavebeensosignificantthatacrosstheIEAcountriesasawholetotalfinalenergydemandhasremainedsteadyataround140EJ,evenaseconomicactivityrose40%overthesameperiodforthegroup.Insomecountriesandsectorsenergyconsumptionhasactuallyfallen.IntheUnitedKingdom,forexample,totalresidentialenergyconsumptionfrom2000to2019fellbyaround270PJ,or15%,evenas500millionm2offloorareawasadded.Thisisequivalenttoanextra5.3millionhomes,orabout260000newhomesbeingaddedeveryyear.Thisreductioninresidentialenergydemandcamefroma29%increaseintheoverallefficiencyofbuildings,withenergyintensityoffloorspacefallingfrom0.83GJperm2in2000to0.59GJperm2in2019.Changeinenergyconsumption,byselecteddriversandcountries,2000-2019IEA.CCBY4.0.Note:2000-2019isusedasthetimeperiodratherthan2000-2020toexcludetheextraordinaryeffectsofCovid-19whichsignificantlyreduced2020energyconsumptioninmanycountries.Forbuildings:energy=residential,activity=flooraream2;efficiency=GJ/m2floorarea;forIndustry:energy=manufacturing;activity=industrialvalueaddedUSD2015PPP;efficiency=GJ/industrialvalueaddedUSD2015PPP;fortransport:energy=totalroadtransportcarsandlighttrucks;activity=vehiclekilometrestravelledcarsandlighttrucks;efficiency=carsandlighttrucksMJ/vehiclekilometre.InJapan,vehicleefficiencyprogressisparticularlystrong.Longstandingpolicieshavepromotedverysmall"kei-cars”andhybridelectricvehiclesareahighproportionofnewcarssold.Asaresult,theratedfueleconomyofnewlight-dutyvehiclescontinuestoimprove.Totalfinalenergyconsumptionofcarsandlighttrucksfellbymorethan470PJor24%forthetwodecadesbeforetheonsetofCovid-19.ThiswasachievedevenasthedistancetravelledbyJapanesemotoristsroseby26billionkmperyear—theequivalentofaround400extrakmforeverycarontheroadin2022.-50%-40%-30%-20%-10%0%10%20%30%40%50%BuildingsIndustryTransportBuildingsIndustryTransportBuildingsIndustryTransportBuildingsIndustryTransportGermanyJapanUnitedKingdomUnitedStates2000-2019%changeEnergyActivityEfficiencyEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE31IEA.CCBY4.0.IntheUnitedStates,energyconsumptioninmanufacturingfellby25%or3500PJ,evenasthetotalvalueaddedfromthesectorrosebyone-third.Thisincludedlightindustrysuchasfood,textilesandpaper,andheavyindustriessuchaschemicals,plastics,basicmetalsandcement,aswellascarmanufacturing,electronicequipmentandfurniture.ThelargestfutureenergyefficiencyopportunitieswillbefoundinemerginganddevelopingeconomiesEmergingmarketanddevelopingeconomiestogetheraccountforaround260EJor60%ofglobalfinalenergydemand.Undercurrentpolicysettings,thisdemandisexpectedtogrowalmost20%by2030,toaround305EJ,increasingitsglobalshareby5%asenergydemandinadvancedeconomiesstaysrelativelysteady.Inemergingeconomies,higherratesofenergyconsumptionaregenerallyexpectedasnewinfrastructureisbuiltrequiringenergy-intensiveindustrialproductssuchassteelandcement.Manycitizensarealsogainingaccesstomodernenergyservicesforthefirsttime,whichwillresultinhigherenergyconsumptioninthebuildingandtransportsectors.Behindthisenergygrowthstoryisariseinenergyconsumptionperpersoninemergingeconomiesastheymodernise.Forexample,anaveragepersoninanEMDEcurrentlyusesthreetimeslessenergyintheirhomeandfourtimeslessenergyfortransportcomparedwithanaveragepersoninanadvancedeconomy.Asemergingcountriesaccountforanever-greatershareofenergydemand,thelargestenergyefficiencyopportunitieswillincreasinglybefoundincountriessuchasBrazil,China,India,Indonesia,MexicoandSouthAfrica.Giventhecriticalimportanceofthesecountriestoglobalenergysecurityandclimategoals,theIEAiscollaboratingwiththemandothersinAfrica,theASEANandLatinAmericanregionstosupportenergyefficiencythroughitsEnergyEfficiencyinEmergingEconomies(E4)programme.Forexample,theBrazilianAtlasofEnergyEfficiencyillustrateshowgrowthinaverageincomeshasbeenaprimedriverofenergyconsumptionandhowefficiencypoliciesandprogrammeshavehelpedtomitigatedemandgrowth.TheAtlas,incollaborationwiththeIEAoverthepastfewyears,hasdevelopedarobustlevelofdataprovidingstronginsightstotrackefficiencyimprovementsandassesspoliciesacrossthehousehold,industrialandtransportsectors.InmanyEMDEcountries,beforetheonsetofCovid-19energydemandgrowthrateshaddecelerated,stabilisedorevendeclined.Forinstance,averageannualgrowthinindustrialenergyconsumptionfellfromover10%peryearfrom2000to2010inChinatoaround1-2%from2010to2019,from6.5%to4.5%inIndiaandEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE32IEA.CCBY4.0.from5%to2%inIndonesia.InBrazil,MexicoandSouthAfrica,industrialenergydemandlookedtohavestabilisedorevenstartedtofall.InChina,severalhigh-levelenergyefficiencypolicieshavebeenannouncedin2021and2022,includingtheGuidanceonCarbonDioxidePeaking,anActionPlanforIncreasingIndustrialEnergyEfficiency,andablueprintforcarbonpeakingandneutralityforurbanisationandruraldevelopment.Theseincludetargetstoincreaseelectrificationofbuildingsto65%by2030andupgradeoldelectricmotorssothat70%ofthestockusenewefficientmodels.NewminimumstandardssetinFebruary2022for17energy-intensiveindustriesalsoaimtoencourageadoptionofadvancedequipmentandnewtechnologyby2025.Annualaveragechangeinfinalenergydemand,inselectedEMDEcountries,2000-2019IEA.CCBY4.0.0%5%10%AfricaASEANBrazilChinaIndiaIndonesiaMexicoSouthAfricaFinalenergyconsumption0%5%10%15%AfricaASEANBrazilChinaIndiaIndonesiaMexicoSouthAfricaIndustry0%5%10%AfricaASEANBrazilChinaIndiaIndonesiaMexicoSouthAfricaTransport-10%-5%0%5%AfricaASEANBrazilChinaIndiaIndonesiaMexicoSouthAfricaResidential2000-20102011-2019EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE33IEA.CCBY4.0.China’ssteelsectoraccountsforoverhalf(53%)ofglobalproductionandhastheabilitytoshifttheneedleonglobalenergyintensity.Productionhitrecordlevelsin2021,butsawa2.2%dropincrudesteeloutputfromJanuary-October2022,alongsidean11.3%dropforcementoutput.Afurtheroutputreductionwasexpectedfollowingactionstocapnewcrudesteelproductioncapacityandpushdownproduction,bothtoreducecarbonemissionsandrelievecostpressuresforsteelmakers.WithadditionalimpactfromreduceddemandinChina’srealestatesector,combinedwithplanstoincreasetheshareofscrapsteelandElectricArcFurnace(EAC)capacity,aconsensusisdevelopingacrosstheindustrythatChina’ssteelconsumptioncouldsoonreachitsupperlimit,whichwouldaccelerateprojectedtimeframesforapeakinemissions.China’spetrochemicalsindustryhasalsoseencontrolsintroducedforcrudeoilprocessingcapacityof1bntonnes/yearby2025aspartofbroaderemissionspeakingplans.Growthintransportenergyconsumptionhasalsomoderatedinthelargestemergingcountries.DemandgrowthinBrazilslowedtoaround2%peryearonaverageover2010-19comparedwith4%thedecadepreviously,Chinato6%from9%,Indiato5%from7%andSouthAfricato1%from2%.InMexico,transportenergyconsumptionwassteadyover2010-19.OnlyinIndonesiawastransportconsumptionhigher,risingtoanaverage7%peryearover2010-19comparedwitharound4%duringthepriordecade.Residentialenergyconsumptiontrendsinemergingeconomieshasbeendrivenbyenergysavingsfromthetransitionawayfromthetraditionaluseofbiomassforheatingandcookingbeingoffset,inlargepart,bytheaddedenergyusefromaccesstomodernenergyservicessuchasairconditioning.Around5billionpeopleliveinareasrequiringspacecooling,butonlyone-thirdofhouseholds,mostlyinadvancedeconomies,currentlyhaveanairconditioner.Theneteffectofthesedrivers,combinedwithimprovingefficiency,hasgenerallyslowedenergyconsumptiongrowthorevenledtoadeclineforsomecountriessuchasIndonesia.1.3FinanceandinvestmentEnergyefficiency-relatedinvestmentsettorisebyarobust16%in2022Afteryearsofweakornogrowthinthesecondhalfofthelastdecade,energyefficiency-relatedend-useinvestmentbegantorisestronglyin2021.Thiswasdrivenbygovernmentstimulusprogrammesinthebuildingssectorandarecoveryintransportinvestment,afterdecliningbyaround50%in2020duetothepandemic.In2022,strongoverallgrowthcontinued,withtransportovertakingbuildingsasthemainsectorforincreasedspending,drivingtotalefficiency-relatedinvestmentupby16%tojustoverUSD560billion.However,inflationandrisingEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE34IEA.CCBY4.0.costsareoffsettingaroundhalfofthegrowthinefficiency-relatedinvestmentduetosupplychainpressures,risinglabourcostsandhighermaterialprices.Cleanenergyinvestments–comprisedofenergyefficiencyandend-usespending–continuetobesignificantlylowerinEMDEsthaninadvancedeconomies.Globalenergyefficiency-relatedend-useinvestment,2015-2022,andaveragesbyscenario,2026-2030IEA.CCBY4.0.Note:Energyefficiencyinvestmentcomprisestheincrementalspendingonnewenergy-efficientequipmentaswellasthefullcostofrefurbishmentsthatreduceenergyuse,whichallowsforcapturingallspendingthatleadstoreducedenergyconsumption.Investmentinenergy-efficienttransportcomprisesadditionalspendingonefficientroadvehiclesandroadelectricvehicles,includingplug-inhybridvehicles.Source:WorldEnergyInvestment2022.Undercurrentexpectedpolicies,efficiency-relatedinvestmentisprojectedtorisebyafurther50%,toalmostUSD840billionperyearby2026-30.However,theselevelsareonlyabouthalfoftheenergyefficiency-relatedinvestmentneededinthesecondhalfofthisdecadetomeettheNetZeroScenariogoals.Massiveeffortstoaccelerateinvestmentsinbuildingefficiencyandelectrificationoftransport,heating,coolingandindustrialproductionarerequiredtorealiseglobalclimateambitions.IntheNetZeroScenariooftheWEO2022,theshareofinvestmentinenergyefficiencyandelectrificationrisesfrom17%ofthecurrenttotalto32%by2030,and40%by2050.2022isexpectedtoseeonlyamodestincreaseinbuildingefficiencyinvestmentof2%,justaboveUSD240billionglobally.Thesignificantslowdowncomparedwiththe12%year-on-yeargrowthin2021resultsfromhigherconstructionandmaterialcosts,increasedfinancingcosts,aswellaslowerspendinginemergingmarketsanddevelopingeconomies.025050075020152016201720182019202020212022EBillionUSD(2021)Industry(energyefficiency)Industry(electrification)Buildings(energyefficiency)Buildings(electrification)Transport(energyefficiency)Transport(electrification)025050075010001250150017502026-30STEPS2026-30NZEEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE35IEA.CCBY4.0.Electricvehiclesalespushtransportefficiency-relatedinvestmentupbyalmost50%in2022Globalefficiency-relatedtransportinvestmentisforecasttoriseasubstantial47%in2022,toUSD220billion.ThisincludesjustoverUSD90billionforelectrification,upUSD37billion,or67%,comparedwiththeyearbefore.Investmentintheelectrificationoftransportnowaccountsforaround42%oftotalefficiency-relatedtransportinvestment,upfromjust19%in2019.Electricvehiclesaleshavenearlydoubledforthelasttwoyearsinarow,hittingaround11millionunitssoldworldwidein2022,upfromjust1millionin2017.Thismeansthatelectricvehiclesnowaccountfor13%ofnewvehiclesalesworldwide,upfromjustover1%fiveyearsago.ThistransitionwassupportedbygovernmentspendingonsubsidiesandincentivesforEVs,whichnearlydoubledin2021toaboutUSD30billion.Nonetheless,thedecreasingshareofgovernmentsubsidiesintotalspendingforelectriclight-dutyvehiclesandsoaringsalesnumberssuggestthatconsumerchoiceisbecomingamajordriverinmoreadvancedEVmarkets.Globaltrendsinnewelectricpassengerlight-dutyvehiclesales,2015-2022IEA.CCBY4.0.Source:GlobalEVOutlook2022.Investmentinconventionalenergyefficiencyinthetransportsectoralsoperformedstrongly,risingUSD33billion,or35%,toUSD128billion,drivenbyincreasedspendingformoreefficientvehicles,includinghybridelectricvehicles.Fueleconomystandardsareoneofthekeypolicyinstrumentstoimprovevehicle3%6%9%12%15%18%2468101220152016201720182019202020212022EEVshareoftotalsalesMillioncarsChinaEuropeNorthAmericaJapanandKoreaShareoftotalsales(Leftaxis)(Rightaxis)EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE36IEA.CCBY4.0.efficiencyofconventionalvehicles,andifstringentenough,contributetodrivingelectricvehicles(EVs)intothemarket.WhileEVsalesdoubledindevelopingAsia,andspikedinseveralmarketsinEasternEurope,LatinAmericaandtheCaribbean,theirmarketshareisstilllowinlargeemergingeconomieslikeBrazil,IndiaandIndonesiawithlessthan0.5%ofcarsales.Thelatterreflectsanumberoffactorsincludinglowercostcompetitivenesscomparedwithconventionalvehiclesaswellasasmallerportfolioofvehiclemodelsavailableversusadvancedeconomies.Globalelectriclightcommercialvehiclesalesincreasedbymorethan70%in2021.Despiteastrongeconomiccaseforelectrifyinglightcommercialvehicles,particularlydeliveryfleetsinurbanareas,theirmarketshareofsalesisstillonlyat2%.Investmentsinelectrictwo-andthree-wheelers,aswellasintheelectrificationofbusesandheavy-dutyvehicles,alsoincreasedin2021.InMay2022,theGreenClimateFund(GCF)approvedaUSD1.5billionprivatesectorE-mobilityFinancingProgrammeforIndia,aimingtoprovidefinancingsolutionstoelectricvehicleownersandoperators,aswellascharginginfrastructureandbatteriestosupportthedevelopmentoftheEVecosystem.E-bussalesrose40%andsalesofelectricmedium-andheavy-dutytrucksmorethandoubledcomparedwith2020volumes.Chinadominatesthemarketinallsegments,reachingnearly9.5millionor95%ofelectrictwo-andthree-wheelerregistrationsworldwideand90%ofe-busande-truckregistrationsin2021.Batteryswappingisgainingtractioninseveralmarkets,particularlyfortwo-andthree-wheelersinAsia.Indiaintroducedadraftbatteryswappingpolicyfocusingontwo-andthree-wheelersinApril2022,andIndonesia'sMinistryofEnergyandMineralResources(ESDM)isrevisingMinisterialRegulationNo.13of2020toincreasethenumberofchargingandbatteryswappingstations.Chinarecordedsalesof250000batteryswappingvehiclesin2021,whichareexpectedtogrowwiththesupportofpolicesandinnovativebusinessmodelslikebattery-as-a-service.BulkprocurementandmasselectrificationofbusesinChileandIndiaUnderthefleetrenewalandexpansiontenderoftheMinistryofTransportandTelecommunicationsofChile,almost1000electricbuseswereprocuredforuseinSantiago'spublictransportsystem.Thisbringsthecapital'spublictransportfleettojustabove1700electricvehicles(over25%ofthefleet),makingChilethecountrywiththesecond-largesturbane-busfleetafterChina.Indiaaimstoelectrifyitspublicbusfleetthroughbulkprocurementprogrammes,with50000busesprocuredoverthenextfiveyears.IntheGrandChallengee-EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE37IEA.CCBY4.0.bustenderinearly2022,ConvergenceEnergyServicesLimited(CESL),asubsidiaryoftheIndianSuperESCOEESL,successfullytenderedover5450e-busesacrossfivecitiesunderitsFAMEIIscheme.ThetenderledtothelowestpriceeverbasedonaGrossCostContractthatprovidese-mobilityasaservice.Thebusesareexpectedtooperatearound7.1billionkmover12years,savingalmost1.9billionlitresoffuelandcreatingemploymentforatleast25000people.InJuly2022,CESLalsosignedaMoUwithfintechcompanyThreeWheelsUnited(TWU)fortheprocurementof70000electricthree-wheelerstobedeployedacrossIndiainaphasedapproachstartinginBengaluruandDelhi.ChinacontinuestodriveglobalgrowthinESCOmarketEnergyservicecompanies(ESCOs)provideawiderangeofservicesforconsumers,fromgenerationandsupplytoenergymanagementandefficiencyretrofits.ESCOsofferspecialistsupporttomakeiteasierforenergyuserstoidentify,financeandimplementprojects,andcanplayaparticularlyimportantroleinreducingtheupfrontcostofefficiency-relatedinvestments.TheglobalESCOmarketincreased9%toUSD38billionin2021.InvestmentinChina,thebiggestmarket,grewby9%toUSD22billion.Recentinitiativesacrosstheworldincludeinnovativeanddigitalbusinessmodels,andbetterprojectaggregation,includingportfolioapproaches,servicepackagingandSuperESCOs.BothKenyaandSenegalhaveembarkedonsettingupSuperESCOs,whileSaudiArabiaandthreeofsevenUAEemirateshaveoperativeSuperESCOs.PrivateSuperESCOSOFIACinCanadaandClimargyinthePhilippinesrecentlybecameoperational.InvestmentinESCOprojects,worldwide,2015-2021IEA.CCBY4.0.Source:BasedonIEAannualESCOmarketsurveys,includingthe2022collaborationwiththeGlobalESCONetwork.05101520253035402015201620172018201920202021BillionUSD(2021)OtherEuropeUnitedStatesChinaEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE38IEA.CCBY4.0.ESCOinterventionsinbuildingsdominateinmanymarketsinEurope,NorthAmericaandAsia,andin2021reachedover50%ofmarketshareinChinaforthefirsttime.IndustrysectorprojectsarestronglyrepresentedinJapan,intheRepublicofTürkiye(hereafter,“Türkiye”)andseveralotherAsianmarkets,whileelectricvehiclefleetacquisitionsmayopenupnewopportunitiesinbothadvancedandemergingeconomies.InNovember2022,theEuropeanInvestmentBankfinalisedaEUR220millionfundtotargetenergyefficiencyandbehind-the-meterrenewableenergyinvestmentsandsupportESCOsacrosstheEuropeanUnion.ResultsofthemostrecentannualIEAESCOmarketsurveysuggestthatwhilehighenergypricesandheightenedawarenessofenergyefficiencymeasuresprovidenewopportunities,obstaclessuchasthelackofavailablepersonnelandshortagesofneededsuppliesaswellasrisingmaterialcosts,hamperprojectimplementation.Creditriskontheclient’sside,alackofdemandandtrustintheESCOindustry,aswellasadministrativeandregulatorybarriers,remainamongthemostimportantchallenges.Delaysinthephaseoutofenergysubsidiesinseveralmarkets,andgovernmentsupportprogrammesthatexcludethird-partyactorslikeESCOs,addfurtherobstacles.TarshidtheSuperEnergyServiceCompanyofSaudiArabiaSaudiArabia’sPublicInvestmentFundestablishedTarshidin2017withaninitialcapitalisationofUSD500millionasaSuperESCO.Itfocusesonimprovingenergyefficiencyinpublicbuildings,includingstreetlighting,governmentoffices,schoolsandmosques,aswellasprojectsinthecommercialsector.AllpublicbodiesaremandatedtocontractwithTarshidonanexclusivebasisandtheESCOisexpectedtocover70%ofallenergyefficiencyprojectsinthecountry,estimatedataUSD11billionmarket.TarshidusesenergyperformancecontractingtoacquiretheservicesofprivatesectorESCOstodeliverenergyefficientequipmentandothersolutions.Forexample,in2022Tarshidsetabouttherehabilitationofuniversitybuildings,withenergysavingsofanestimated115millionkWhannually,equivalenttofreeing77000barrelsofoilequivalentthatcanbeusedforexportorotherpurposes.Tarshidalsocompletedin2022arolloutof54000LEDpubliclampposts,deliveringestimatedenergysavingsof104millionkWhor60%comparedwithpreviouspubliclighting.Smallandmedium-sizedenterpriseslooktosaveenergythroughefficiencymeasuresThereareapproximately333millionbusinessesclassedasMSME(Micro,SmallandMedium-sizedEnterprises)throughouttheworld,contributingfrom9%to29%EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE39IEA.CCBY4.0.ofnationalenergydemand.InAsia,MSMEsaccountfor97%ofallenterprisesand69%ofthelabourforce,whileEurope’s23millionsmallandmediumenterprises(SMEs)employaround83millionpeopleorabout38%ofthelabourforce.TheyaccountforabouthalfofEurope’sGDPandplayakeyroleinaddingvalueineverysectoroftheeconomy.OnerecentsurveyfoundthatmorethanhalfofMSMEsareplanningtoimplementnewmeasurestoimproveenergyefficiencyintheimmediatefutureand61%arealreadyputtingtheminplacetosaveenergy.Forexample,inMexicothegovernmenthashelpedprovideconcessionalloanstosmall-andmedium-sizedenterprises,whichrepresent98%ofthecountry’sbusiness,toimplementaround36000standardisedefficiencymeasuressuchasreplacementofoldequipment.TohelpsmallerbusinessesovercomethesechallengesandtosustainEuropeaneconomies,theEuropeanCommissionandtheIEAteameduptoraisetheawarenessofgovernments,businessesandrelatedstakeholdersaboutavailableoptionstoempowerandprotectSMEs.Separately,anamendmenttotheTemporaryCrisisFrameworkforstateaid,whichgivesMemberStatesmoreleewaytosupportcompaniesandmakesavailableEUR40billionofEuropeanUnionCohesionFunding,hasbeenenacted.In2022,theUnitedKingdomintroducedagrantschemetohelphouseholdsandsmallbusinessesinvestinheatpumpsandbiomassboilers.ThegovernmentbuiltonthisinitsAutumnBudgetStatementbyallocatingextrafundingfrom2025to2028.Itwillbeoverseenbyanewtaskforcechargedwithinsulatinghomes,upgradingboilersandreducingoverallenergydemandby15%thisdecade.TheCzechRepublicintroducedanewguaranteeforsmall-andmedium-sizedenterpriseswhoseenergycostsaccountformorethan10%oftotaloperatingcosts.Meanwhile,theUSDepartmentofEnergy(DOE)announcedthatUSD53millionwillbedirectedatsmallbusinessespursuingcleanenergyandclimatesolutions.1.4InnovationPublicenergyefficiencyRD&DspendingsteadyfollowingadecadeofgrowthPublicspendingonresearch,development,anddemonstration(RD&D)inenergyefficiencywassteadyin2021ataroundUSD6billion.Spendingremained50%higherthanin2015inrealterms.Efficiency-relatedpublicRD&Dspendingin2021continuedtobedominatedbytransport(49%),followedbyindustry(24%).OverthelastdecadeenergyefficiencyasashareoftotalgovernmentenergyRD&Dinvestmenthasbeenrisingsteadilyandnowrepresentsaquarterofallinvestment.EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE40IEA.CCBY4.0.GovernmentenergyefficiencyRD&Dspending,inIEAmembercountries,2000-2021IEA.CCBY4.0.Source:IEA’sEnergytechnologyRD&Dbudgetsdatabase.VenturecapitalinvestmentsinefficiencyareontherisebutcouldfacesetbacksaseconomicconditionsworsenMuchmoreinnovationwillbeneededtodevelopbetterandcheapercleanenergytechnologiesandputtheworldontrackfornetzeroemissionsby2050.Theroleofcleanenergystart-ups–asidefromgovernmentandbusinessR&DD–isbecomingmoreimportant,particularlytodevelopnewproductsandserviceswithlowerupfrontcoststhantraditionalenergyprojects.In2021,despitethepandemic,venturecapital(VC)investmentsinearly-stagestart-upsdevelopingenergyefficiencytechnologiesforbuildings,industryandpowerrosebyover30%toUSD1.1billion.Theincreasewasprimarilyledbycompaniesadvancingsmartgridsandintegratedpowerflowoptimisationconcepts,whichattractedmorefundsthananyotheryear.Meanwhile,early-stageVCinvestmentsintransportelectrificationandbatterytechnologiesincreasedbyover40%toUSD1.8billion,largelyledbytheexpansioninbatterymarkets.Late-stageVCinvestmentsinefficiencystart-upsrosesignificantlyin2021aswell,morethandoublingtoUSD4.3billion,toanewall-timehigh.Theincreasewasledbypowerandsmartgrids,andenergyefficiencyinbuildings.ElectricmobilityandbatterycompaniesraisednearlyUSD22billion–up70%relativeto2020–withfundstargetedforgrowth,scale-upandmarketexpansion,faraheadofotherefficiency-relatedtechnologyareas.Intransport,atechnologyrevolutionisunderwaywithinnovationextendingelectrificationfrontiersandsteeringinvestors’focustowardsEVscale-up.Infact,astheindustrymatures,early-stagemoneyinEVstart-upsisclearingspaceforsoaringlater-stagefinancingrounds:in2021VCinvestmentsintransportelectrificationweredown25%inearlystagesbutupbyover5%inlatestages.0%5%10%15%20%25%30%0123456720002003200620092012201520182021RD&Dinvestment(billionUSD)UnallocatedOtherTransportBuildingsIndustryEEshareintotalinvestment(rightaxis)EnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE41IEA.CCBY4.0.Inparallel,innovationisacceleratingatthebatterylevel–frommineralextractiontomanufacturing–asdemandbooms,withVCinvestmentsmorethantriplingatallstages.Newcross-cuttingfieldsareemerging,suchasbatterymanagementsystems,whichattractednearlyUSD50millionin2021.TheseincludedIndia-basedIONEnergyandGermany-basedvolytica,whichdevelopbatterydiagnosticssolutionstoimproveperformanceandlifetime.TheUnitedStates,Europe,andChina,asinpreviousyears,leadenergyVCinvestments.Preliminarydatasuggestapossibleslowdowninearly-stageVCinvestmentsinthefirsthalfof2022asthesectorisimpactedbytherisk-offapproachtotechnologyinvestmentoffinancialmarketsthisyear.Globalventurecapitalinvestmentsincleanenergystart-upsinthefieldsofefficiencyandelectrification,bytechnologyareaandbyregion,2015-H12022IEA.CCBY4.0.Note:Thisclassificationconsidersstart-upsdevelopingenergyefficiencytechnologies,servicesandsolutionsincludingbothhardwareandsoftware.Early-stagedealsaredefinedasseed,seriesAandBdeals.Verylargedealsinthesecategories–aboveavalueequaltothe90thpercentilegrowthequitydealsinthatsectorandyear–arereclassifiedaslate-stagedeals,whichalsoincludegrowthequity,late-stageprivateequity,andprivateinvestmentsinpublicequity.“Buildingsenergyefficiency”includesbuildingenvelopes,heatingandcooling,energymanagementsystems,lightingandsmartdevicesforresidentialandcommercialbuildings.Transportelectrificationandfuelefficiencyincludeselectricvehiclesbutexcludesassociatedbatterytechnologies,whichareseparatedandincludebatterymineralextractionandprocessing,components,manufacturing,recyclingandmanagementsystems.2022includesH12022:Preliminarydataforthefirsthalfof2022.Source:IEAcalculationsbasedonCleantechGroup,i3database(2022).Alsosee:WorldEnergyInvestment2022.0123BillionUSD(2021)Early-stageBuildingsenergyefficiencyTransportelectrificationandfuelefficiencyPowerandsmartgridsBatterytechnologiesIndustrialefficiencyElectronics,ICTanddatacentresOtherenergyefficiency0102030Late-stage02004006000123Early-stageRestofworldChinaEuropeUnitedStatesNumberofdeals(right)02004006000102030Late-stageEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE42IEA.CCBY4.0.Growthindigitalenergyefficiencymodelsshiftsfromearly-stagetolate-stageventurecapitalfundingIntheworldofcleanenergystart-ups,digitalisationhasbecomeabuzzwordasentrepreneursincreasinglyseeknewideasbasedondigitaltoolsorprocessesandpursuenewdigitalbusinessmodels,suchasenergy-as-a-service(EaaS)andvirtualpowerplant(VPP)aggregatormodelsfordistributedenergyresources(DERs).Innovationandaccesstonewtypesofdataarecreatingadditionalopportunitiesfortraditionalenergycompaniesandutilities,aswellasinindustry,transportandbuildings.Aftershowingimpressiveresiliencethroughthepandemic,early-stageVCinvestmentsinenergyefficiencystart-upsthatdevelopdigitally-enabledbusinessmodelsdroppedbyabout20%in2021toUSD800million.ThedeclinewasmainlybecauseofmuchlowerinvestmentsinEVchargingasaservice.ThiscouldreflectthebroadertrendthatcompaniesdevelopingEVsandassociatedtechnologies,whichreceivedsubstantialfundingoverthelastdecade,havematuredandmovedtolaterstagesofdevelopment.Excludingthese,theobserveddeclinewouldhavebeena15%increase.CompaniesprovidingEaaSinbuildings,aswellasDERsandgridmanagement,raisedmoreearly-stageVCmoney,ataboutUSD370millionandUSD200million,respectively.DigitaltechnologiesformthebasisofnewbusinessmodelsTheuseofdigitaltechnologiesincreasesaccessofnewbusinessmodelstoend-usercustomers.Theenergy-as-a-service(EaaS)businessmodel,wherecustomerspayforanenergyservicewithouthavingtomakeupfrontcapitalinvestmentsthroughasubscriptionscheme,shiftsthefocusawayfromasset-basedtoconsumer-centricandservice-orientedofferings.Businessservicemodelapplicationsrangefromprovidingefficiency,lighting,cooling,orstorageasaservice,throughtomobilityservicessuchasridesharing,EVchargingorbattery-as-a-service.Thephysical,digitalandICTinfrastructurethatisusedopensthemarketforawiderrangeofplayers,includingutilities,ESCOs,industrialequipmentsuppliers,telecom,andtechnologyproviders,amongothers.Themarketisexpandingrapidly,althoughgrowthprojectionsvarywidely,withestimatedpotentialrangingfromUSD19billionby2025uptoUSD148billionby2029.BatteriesarethemostexpensivecomponentofanEV,soseparatingthebatteryfromthevehiclecanreduceupfrontinvestmentcosts–oneofthemajorbarrierstolarge-scaleEVdeployment.Batteryswappingmodelscanalsoallowcustomerstobenefitfromadvancesinbatterytechnologyandleadtobetterchargingmanagement,therebyextendingbatterylifeandimprovingoptionsforvehicle-gridEnergyEfficiency2022Chapter1.EnergyefficiencytrendsPAGE43IEA.CCBY4.0.interactions.Themostwidelyadoptedapproachtoprovidingbatteryswappingisleasingbatteriestocustomersthroughabattery-as-a-servicemodel.China’sbatteryswappingmarketisoneofthefastestgrowingmarketsforthetechnology.AsofSeptember2022,over1760batteryswappingstations(BSS)hadbeendeployed,a98%increaseyear-on-year.AccordingtoBloombergNewEnergyFinance,sixofthebigChinesebattery-swappingprovidersplantobuild26000BSSbytheendof2025–analmost15-foldincreasefromcurrentlevels.Indiaisalsomakingimportantstepstowardsthescalingupofbatteryswapping,especiallyfortwo-andthree-wheelers,withNitiAayogreleasingadraftbatteryswappingpolicyinApril2022.ThreeIndianstates(Delhi,MaharashtraandGoa)currentlyofferpurchasesubsidiesforelectrictwo-wheelerswithoutpre-fittedbatteriesandseveralstatesofferincentivesforsettingupswappingstations.Incontrasttotheearly-stagedip,late-stageVCinvestmentsmorethantripledin2021year-on-year,tooverUSD3billion,withthenumberofdealsrecoveringtopre-Covidlevels.TheincreasewasprimarilyledbyDERsandgridmanagement,whichattractedalmostUSD1billionin2021fromnearlyzeroin2020,bychargingasaservice,andadoublingforEaaSinbuildings.OneexampleisDaystarPower,whichprovideshybridsolarsystemstobusinessesinWestAfricathroughapower-as-a-servicemodelandraisedUSD38millioninSeriesBin2021.GlobalVCinvestmentsinenergyefficiencystart-upsdevelopingnewtypesofdigitalbusinessmodel,2015-2021IEA.CCBY4.0.Note:Thisclassificationconsidersstart-upsdevelopingenergytechnologies,servicesandsolutions,includingbothhardwareandsoftware,andthatareengagingwithendusersdirectly.Start-upsthatfocusonmanufacturingordistributinghardwareonlyareexcluded.Energy-as-a-service(EaaS)inbuildingsincludessmartheatingandcooling,energymanagementsystems,lightingandsmartdevicesforresidentialandcommercialbuildings.Distributedenergyresourcesandgridmanagementincludesvirtualpowerplants,energytradingschemeslikepeer-to-peer,andoff-gridaccesssolutionssuchaspayasyougo.Early-stagedealsaredefinedasseed,seriesAandseriesBdeals.Verylargedealsinthesecategories–aboveavalueequaltothe90thpercentilegrowthequitydealsinthatsectorandyear–areexcludedandreclassifiedaslate-stageinvestments,whichalsoincludegrowthequity,late-stageprivateequity,andprivateinvestmentsinpublicequity.Source:IEAcalculationsbasedonCleantechGroup,i3database(2022).Alsosee:EnergyEfficiencyMarketReport2021.020406080100120140012342015201620172018201920202021BillionUSD(2021)Early-stageEnergyasaserviceinbuildingsDistributedenergyresourcesandgridmanagementChargingasaserviceEnergyasaserviceinindustryEnergyasaservice(others)OthersNumberofdeals(right-axis)020406080100120140012342015201620172018201920202021Late-stageEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE44IEA.CCBY4.0.Chapter2.Policyandtechnology2.1NationalandinternationaldevelopmentsOverUSD1trillionmobilisedsince2020tosupportenergyefficiencyincleanenergyrecoverypackagesTotalrecoveryspendingmonitoredbytheIEA’sSustainableRecoveryTrackerhasrisenstronglyasgovernmentshaverampedupcleanenergyinvestmentsince2020andrespondedtotheenergycrisistriggeredbyRussia’sinvasionofUkraine.ThisanalysissuggestsoverUSD1trillionhasnowbeenmobilisedforenergyefficiency-relatedactionsbetween2020and2023.ApproximatelyUSD270billionisdirectpublicspendingandafurtherUSD740billionismobilisedspendingonefficientbuildingretrofits,vehicles,transportinfrastructureandindustrialefficiencyprojects.Efficiencyspendingconstitutesaroundtwo-thirdsofthetotalgovernmentandleveragedprivatecleanenergyrecoveryspendingofaroundUSD1.6trillionsince2020until2023.Cleanenergyandrecoveryspending,2020-2023IEA.CCBY4.0.Note:Mobilisedspendingincludesprivateandpublicspendingmobilisedbygovernmentaction.Source:IEATrackingSustainableRecoveries;asofApril2022.66%60%34%40%0200400600800100012001400GovernmentspendingMobilisedspendingUSDbillion2020-2023OthercleanenergyandsustainablerecoveryEnergyefficiency-relatedEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE45IEA.CCBY4.0.Cumulativecleanenergyrecoverygovernmentspendingearmarkeduntil2023IEA.CCBY4.0.Source:IEASustainableRecoveryTracker;asofApril2022.ThesespendingnumbersareexpectedtorisewhenthisanalysisisupdatedforthefullyearbytheIEAasmanygovernmentshaveenactednewinvestmentpackagessincemid-2022.IntheUnitedStates,CongresspassedtheInflationReductionActinAugust2022tohelpaddresshighercostsoflivingandotherrelatedissues.AnunprecedentedUSD369billionofthetotalpackageofUSD737billionhasbeenallocatedforenergyandclimatechangemeasurestobespentovertenyears.EnergyefficiencyprovisionsofthepackageareestimatedataroundUSD95billion.ThisincludesUSD20billionofcleantransportationtaxcreditsforelectricvehicles,investmentinzero-emissionvehiclesfortheUSPostalService,publicservicesandzero-emissionsequipmentforportinfrastructure.AboutUSD53billionhasbeenearmarkedforenergyefficiencyinbuildings,includingtaxcreditsforresidentialelectrificationandenergyefficientappliances.AnotherUSD16billionistargetedtowardsthemanufacturingsector,includinggrantsandloansforelectricvehicleproduction,andtaxcreditsforothercleanmanufacturing.Inasignificantmovetoaddresssupplychainchallenges,fundinghasbeenmadeavailablethroughtheUSDefenseProductionActtospeeduptheproductionofcleanenergytechnologiessuchasheatpumps,insulationandphotovoltaicspanels.Inanothermajordevelopment,theEuropeanUnionlaunchedtheRePowerEUplaninMay2022toacceleratethecleanenergytransitionandtoreducerelianceonRussianfossilfuelsbyaimingtocutitsusebytwo-thirdsbytheendof2022and100%by2030.Energysavingsisoneoftheplan’sthreecentralpillars.ItforeseesanincreaseoftheprevioustargetundertheEnergyEfficiencyDirectiveforEU-wideenergysavingsfrom9%to13%,withthegoalofdoublingthedeploymentrateofheatpumpstoaround10millioncumulativeunitsover2023-020406080100120EfficientbuildingretrofitsLow-carbonvehiclesRailUrbantransitIndustrialenergyefficiencyOtherenergyefficiencyVehiclechargingEfficientnewbuildingsAircraftWalkwaysandbikelanesFreight(roadandwater)HeatpumpsandappliancesUSDbillionEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE46IEA.CCBY4.0.27andacceleratingelectrification,especiallyinindustry.TheEUSaveEnergyCommunication,issuedinAugust,outlinesoptionsforshort-termsavingsfromconsumers,andtheCommissionhasurgedMemberStatestolaunchpublicawarenesscampaigns.RelatedtothisistheEuropeanGasDemandReductionPlan,whichsetsoutshort-termmeasurestoreducegasuseinEuropeby15%untilspring2023.TheEuropeanCommissionhasissuedaproposalforfinancingoftheplanbyincreasingtheEURecoveryandResilienceFacility(RRF).ThetotalestimatedexpenditureonthegreentransitionpillarisEUR249billion,withtheenergyefficiencyelementsaccountingforabout29%.InFrance,thebudgetfortheMaPrimeRénovretrofitgrantschemewasincreasedby20%--anextraUSD400million.Theschemereceived430000applicationsbetween1Januaryand11September2022.InSpain,contingencyplanstoaddresstheenergycrisisincludedarangeofefficiencyanddemand-sidemeasures,suchasareductioninpublictransportprices,limitsonheatingandcoolinginpublicbuildings,andaprogrammeofresidentialbuildingauditsandretrofits.BudgetallocationsintheUSInflationReductionActandtheEURecoveryandResilienceFacilityIEA.CCBY4.0.Notes:FundingasofJuly2022.TheUSInflationReductionActincludesbudgetsinseveralcategoriesandtheoneunderanalysishereis“Energyandclimatechange”.TheEURecoveryandResilienceFacilityfocusesonsixpolicypillars,andtheoneunderanalysishereis“Greentransition”.Sources:IEAbasedondatafromCongressionalProgressiveCaucusCenter,EuropeanCommission.Italy’sSuperbonusretrofitscheme,thelargestsingleretrofitgrantprogrammeinEurope,hasofferedtaxcreditsworthmorethanUSD55billionbyOctober2022.Inlate2021itwasupdatedtobemademorestringent,witheligibleupgradesmandatedtoraisethebuildingperformancebytwoclasses.Ireland’sNationalRetrofitPlanwaslaunchedinFebruary2022andseekstoupgrade500000EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE47IEA.CCBY4.0.homes,representing30%ofthehousingstock,by2030throughgrantsofupto50%ofthecostofadeepretrofit,whilethecountry’sOne-StopShopsassistwithprojectmanagement,amongothermeasures.InCanada,anewlyannouncedGreenBuildingsStrategy,aimstoincreasetherateofbuildingretrofitsandcreateanet-zero-readybuildingssectorby2050,backedbyUSD109million(CAD150million).InJapan,thegovernmenthaslauncheditsGreenTransformation(GX)PlanandstrengthenedthelegalbasisforimprovingitsenergyefficiencyambitionsbyamendingtheActonRationalizingEnergyUseandBuildingEnergyEfficiencyAct.Thesemeasuresstrengthenbuildingcodesandannualenergyreportingsystemsforlarge-scaleconsumers,includingfordemandresponsemeasures.Itwillalsoprovide,throughathree-yearefficiencyinvestmentplan,subsidiesofJPY500billionforreplacingoldfacilitiesinfactoriesandbuildings.Inordertoeasetheburdenofhighpowerprices,theJapanesegovernmenthasstartedtheSetsudenProgram,withanestimatedbudgetfortheprogrammeofJPY180billion(USD1.25billion).Itpromotesutility-rundemandresponseschemeswitheconomicincentiveswherebyconsumersearnpointsforeverykWhofsavedenergy.PointscanthenbespentforpaymentsformultipleuseslikeelectricitybillsandfamousECmarketswithonepointroughlyequivalenttooneyen,whichleadsconsumerstojointhesesavingprogrammes.TheroleofenergyefficiencyinvestmentinUkrainianreconstructionTheWorldBankreportedthatasof1June2022thewarhasdamagedaround817000residentialunitsinUkraine,ofwhichmorethan312000werecompletelydestroyed.InJuly,attheUkraineRecoveryConferenceinLugano,Switzerland,EUpresidentUrsulavonderLeyensaidthatthewarmadetheworldrealisethat“thedreamofanewUkraine,notonlyfree,democraticandEuropean,but[itwillalso]begreenandprosperous.”Attheconference,theUkrainePrimeMinisterpromisednewhousingconstructionwouldbebasedonEuropeanstandardsandguidelines.AccordingtotheWorldBank,Ukrainehaspotentialforenergysavingsof30%intheresidentialsectorandabout70%ofbuildingshavethepotentialforsignificantenergysavingsforheatingthroughthermalmodernisationanddistrictheating(DH).Ukraine’snationallawonenergyefficiencywasadoptedinOctober2021andprovidesaframeworkforreconstruction.TheEnergyEfficiencyFundofUkrainehasattractedmorethan800projectsafteritslaunchin2019.Forexample,oneprojectfora40-year-oldfive-storybuildinginthecityofLutskisexpectedtoreduceenergyuseby61.5%andsaveanaverageofUAH18100peryearforeachEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE48IEA.CCBY4.0.family.Meanwhile52multi-storeybuildingsfullycompletedtheirenergymodernisationprojects,eveninthemidstofthewar.TheEuropeanInvestmentBank(EIB)isactivelysupportingUkraine’sreconstructionwithitsUkraineSolidarityUrgentResponsepackageworthEUR2.26billion,whichincludesenergyefficiencymeasuresandprojects.TheIEA,whichwelcomedUkraineasits11thAssociationcountry,isdeepeningandexpandingitsworkonUkraine’senergysecurity,cleanenergytransitionandreconstructionefforts.IntheirOctober2022budget,thenewAustralianGovernmentprovidedafurtherAUD62.6millioninfundingallocatedtosupportsmallandmediumenterprisesthatmakeenergyefficiencyupgrades,AUD15billiontodevelopaNationalEnergyPerformanceStrategyandAUD4milliontoexpandtheGreenhouseEnergyMinimumStandardsprogrammeandtheNationwideHouseEnergyRatingScheme.Industrialenergyefficiency,throughaPoweringtheRegionsFund,isalsobeingtargetedaswellasalarge-scaleheatpumpaccelerationprogramme.TheNationalEnergyPerformanceStrategy,currentlyindevelopment,willprovidetheframeworktodelivertheenergyefficiencysavingsrequiredtomeettheir2030and2050emissionsreductiontargets,andreducepressureonconsumersandthegrid.ThenewDutchgovernment’sprioritiesincludeaNationalInsulationProgramtoinsulate2.5millionhomes,makingatotalofUSD3.9billion(EUR4billion)available.Italsoannouncedastrengthenedenergyefficiencyobligationthatmakesitmandatoryforcompaniestoimplementallefficiencyupgradeswithapaybackperiodoflessthanfiveyears.InAugust,IndiaalsoamendeditsEnergyConservationBill,which,amongothermeasures,expandsthescaleandscopeofitsenergyconservationregimethroughnewbuildingcodesandenforcementmeasures.KorealaunchesnewnationalefficiencystrategytostrengthenenergysecurityInQ12022,Koreaspentalmosttwiceasmuchforapproximatelythesamequantityofenergyimportsasinthesameperiodlastyear.Tohelpaddressgrowingenergysecurityconcerns,thenewKoreangovernment,whichtookofficeinMay2022,announcedanambitiousenergyefficiencyplanthataimstoimproveEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE49IEA.CCBY4.0.nationalenergyintensityby25%from2022to2027through15majortasksacrosssectors.TheplanaimstoreducetotalenergyconsumptionofKoreaby22Mtoe,equivalenttosixyearsofpoweruseinSeoul,thecapitalcity.Onceimplementeditisexpectedtoavoid59MtofCO2,KRW1.3trillion(USD1billion)ofpowertransmissionanddistributionfacilitiescosts,andKRW14.6trillion(USD11.2billion)inenergyimports.Decompositionofchangeintotalfinalconsumption,inKorea,2022-2027IEA.Allrightsreserved.Source:MinistryofTrade,IndustryandEnergy(2022)asmodifiedbytheIEA.Inindustry,whichaccountsfor62%ofenergyconsumptioninKorea,anewvoluntarytargetmanagementprogrammecalledKoreaEnergyEfficiencyPartnership(KEEP)willbeintroduced.KEEPwillfocusonenergy-intensivecompanieswithannualconsumptionofatleast200ktoe.Ina2020pilotprogrammeof44businesses,energyintensityat19high-performingsitesimprovedby9.5%comparedwiththeaverageofthepreviousthreeyears.Inthebuildingsector,anewenergysavingrewardprogrammeforapartmentresidentscalledEnergyCashbackwaslaunchedinJuly2022.Inthepilotprogrammeparticipantssaved14.1%ofenergyonaverageperhousehold.Thetotalelectricitysavingwas779MWh,whichisenoughtofullycharge12200EVs.Forwinter2022-23,SouthKoreahasputinplaceemergencymeasuresthatincludecurbsonenergydemand,raisinggasandelectricityprices,securingLNGsupplyandsupportingenergyimporters.67891011EnergyconsumptionEnergyconsumptionbaselineReductionsEnergyconsumptionafterreductions202220272022-20272027EJPresentscenarioNewplanIndustryBuildingTransportEnergysavingsEnergyconsumptionEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE50IEA.CCBY4.0.InFebruary2022ChilelauncheditsNationalEnergyEfficiencyPlan2022-2026.Theoverallaimoftheplanistoprovideastrategicframeworkforthedevelopmentofenergyefficiencyandtorealisetheenergysavingspotentialthatwillleadtocarbonneutralityby2050.Sincelargeconsumersareresponsibleforaround40%ofalltheenergyconsumedinChile,theplanincludessevenspecificmeasuresfortheindustrialsectoraimedatreducingtheenergyintensityoflargeconsumersby4%by2026and25%by2050basedon2019levels.Morethan1000companieswillberequiredtoreporttheirenergyconsumptionandintensityoverthenextfouryears.InEcuadorninepublicpoliciestopromoteenergyefficiencyandreducegreenhousegasemissionswereapprovedinJune2022,andcameintoforceinAugust.Measuresinclude:universalaccesstomoreefficienttechnologies,includingelectricvehiclesande-bikesorscooters;newminimumenergyefficiencystandardsforelectricaldevices,mechanicalequipment,buildingsandvehicles;encouragingthesupportofresearch,innovation,fundingandentrepreneurshiptodevelopandapplyenergyefficiency;mandatingeducationaroundenergyefficiencyandthesimplificationofprocedurestoattractinvestmentinenergyefficiency.HistoricinternationalgatheringsofgovernmentsaddnewmomentuminquestforenergyefficiencyprogressNewactions,policiesandspendingcommitmentsin2022havedemonstratedthatgovernmentsacrosstheworldrecogniseenergyefficiencyasacentraltoolintheresponsetotheenergycrisis.InJune,representativesfrom26governments,including17ministers,attendedtheIEA’s7thAnnualGlobalConferenceonEnergyEfficiencyinSønderborg,Denmark–themostsignificantministerialgatheringfocusingexclusivelyonenergyefficiencytotakeplaceinrecenthistory.Ajointstatementagreedattheconferencebygovernmentsacknowledgedtheimportantroleofenergyefficiencyanddemand-sidemeasuresinaddressinghighenergycostsandimportdependenceandcalledon“allgovernments,industry,enterprisesandstakeholderstostrengthentheiractiononenergyefficiency”.GovernmentsalsowelcomedtheSønderborgActionPlan,consistingofstrategicprinciplesandpolicytoolkitsdevelopedbytheIEAthatcanhelpgovernmentsrapidlyimplementefficiencypolicies.Inthe2022G7Communiqué,globalleadersreaffirmedtheircommitmenttoenergyefficiency,calledforarapidscale-upofenergyefficiencyinvestmentandacknowledgedtheIEAandtheEnergyEfficiencyHubasleadersinfacilitatinginternationalcooperationonenergyefficiency.TheG7conferencefocusedparticularattentiononenergyefficiencyanddecarbonisationinbuildings,aswellastheimportanceofenergyefficiencyasthe"firstfuel”intheenergytransition.AtEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE51IEA.CCBY4.0.theG20meetinginIndonesiaon15-16November,afocusonenergysecuritywasreinforcedbythepublicationoftheIEA’sSecurityofCleanEnergyTransitions2022andEnergySectorRoadmaptoNetZeroEmissionsinIndonesia.aswellastheBalicompact,whichincludesastrongenergyefficiencyfocus.Establishedin2019,theEnergyEfficiencyHub,withitsSecretariathostedbytheIEA,gatheredmomentumwithanumberofhigh-levelpolicyexchangesamongmembersandthroughitstaskgroups.TheseincludedtheSuper-efficientAppliancesDeploymentInitiative(SEAD),ajointbodyoftheHubandtheCleanEnergyMinisterialanddrivingforcebehindtheCOP26ProductEfficiencyCalltoAction,launchedin2021.TheDigitalisationWorkingGroup(DWG)oftheHubwasestablishedunderUSleadershiptoincreaseinternationalcooperationinthefieldofenergyefficiencyanddemandflexibility.TheDWG'sfirstreport,DigitalisationfortheEnergyEfficiencyofBuildingsOperations:LessonsLearnedfromtheEEHubDigitalisationWorkingGroup,assessesthechallenges,opportunities,successes,andlessonsfromnationalpoliciestoacceleratedigitalisationofbuildingenergysystems.TOPTENs,ledbyChina,focusesondomesticandinternationalbestpracticesandtechnologies,andtheEnergyManagementActionNetwork(EMAK),ledbyJapan,facilitatespublic-privateexchangesonsystemsforraisingenergyefficiencyinindustryandbuildings.InOctober2022,theEuropeanCommissionandGermanyledtheestablishmentofthenewEnergyEfficiencyinBuildingsTaskGroup(EEB)withinitialparticipationfromArgentina,Brazil,China,KoreaandSaudiArabia.TheEEBwillinitiallyfocusonshort-termenergysavingsactionsasaresponsetotheenergycrisis,suchasheatpumpdeployment,consumercampaignsandpovertyalleviationand,likeothertaskgroups,willcoordinatewithotherintergovernmentalbodies.2.2Standardsandlabels20countriesareintheprocessofdevelopingnewminimumenergyperformancestandardsInrecognitionoftheirsubstantialcost-effectiveenergysavingspotentialandotherbenefits,morethan100countriesnowusemandatoryminimumenergyefficiencyperformancestandards(MEPS)and/orenergylabelsforthemostcommonappliances.However,policiesarestillabsentinarangeofmarketswheregrowthinownershipofappliancesisrisingrapidly,especiallyinemergingeconomies.Additionalorexpandedstandardsandlabellingschemesareunderdevelopmentinover20countries,mainlyinAsia,EastAfricaandSouthernAfrica.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE52IEA.CCBY4.0.Energyusecoverageofminimumstandardsforkeyenduses,globally,2000-2022IEA.CCBY4.0.Note:Coverageforspacecooling,refrigerationandlightingisshownforresidentialsectors.Sources:IEAanalysisbasedonIEAPAMSdatabase,CLASPPolicyResourcecentre.Ifambitionlevelsareregularlyadjustedtoreflectthelatesttechnologicalprogress,performancestandardsandlabelscanachievesubstantialreductionsinenergyconsumption,aslong-establishedprogrammeshaveprovenoverrecentdecades,deliveringannualsavingsofabout15%.Forlong-runningprogrammes,energylabelsalsoneedtoberegradedeitherbyaddingadditionalcategoriesforhigherperformancelevelsorupdatingtheentiregradingscale.TheEuropeanUnionrecentlyupgradeditslabellingprogramme,includinganintroductionofquickresponse(QR)codeslinkedtotheEuropeanProductRegistryforEnergyLabelling.ForthelastupgradeoftherefrigerationperformancestandardintheEuropeanEcodesignDirective,anewmeasurementsystemwasintroducedtoaccountfordifferentrefrigeratorsizeandothertechnicalfeaturesinauniformway.Thereisalsoawiderangeofvariationinthecoverageandstrengthofprogrammesindifferentcountriesandregions,especiallyemerginganddevelopingeconomies.Forexample,withintheASEANregion,thereareongoingeffortstowardsregionalharmonisationofMEPSforappliancesandequipment.InGhana,17newappliancetypeswillbecoveredbymandatoryMEPSandlabels.ExistingMEPSregulationsforrefrigeratorsandairconditionersarebeingupgradedandprohibitionswillbeintroducedfortheimportofusedelectricalappliancesaswellastothemanufactureandimportofincandescentlightbulbs.Additionally,theratingsonlabelsarebeingre-categorisedfromone-startoseven-startoindicatetheirlevelofefficiency.Theregulationsareexpectedtobepassedbytheendof2022.0%20%40%60%80%100%SpacecoolingRefrigerationLightingWetappliancesDisplaytechnologiesIndustrialmotorsRoadtransportEnergyconsumptioncovered(%)200020102022EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE53IEA.CCBY4.0.Significantscopeexistsforenhancedinternationalcooperationinthisareatohelpgovernmentsbringinnewstandards,learnfrompastexperiencesandadoptbestpractices.Theuseofalignedmandatoryenergylabelsacrossbordersprovidesmanybenefitsincludingasmallernumberoftestingmethods,lowercompliancecostsformanufacturersandgovernmentchecktesting.EnergyusecoverageofMEPSforkeyenduses,2022IEA.CCBY4.0.Note:Coverageforspacecooling,refrigerationandlightingisshownforresidentialsectors.Sources:IEAanalysisbasedonIEAPAMSdatabase,CLASPPolicyResourceCentre.Expandingproductpoliciestothesystemlevelcouldcutenergyconsumptionbyafurther10%Energy-usingsystemsrepresentalargelyuntappedpotentialtoextendthesignificantenergyandgreenhousegassavingsalreadyachievedbyefficiencyregulationsonindividualenergy-usingproducts.Arecentstudybythe4ETechnologyCollaborationProgrammeoftheIEA,ProgressingEnergyEfficiencyPoliciesforSystems,suggestsextendingproductpoliciestocoverrelevantenergy-usingsystemshasthepotentialtoreduceannualglobalconsumptionby9%(17EJ,4780TWh).ThiswouldbelargerthanthetotaluseofelectricityintheUnitedStatesin2021andmorethanthreetimesthecombinedelectricitysavingsgeneratedbytheninemostsuccessfulnationalstandardsandlabellingprogrammesforindividualproducts.0%20%40%60%80%100%GlobalEuropeNorthAmericaLatinAmericaAsiaPacificEurasiaMiddleEastAfricaEnergyconsumptioncovered(%)SpacecoolingRefrigerationLightingWetappliancesDisplaytechnologiesEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE54IEA.CCBY4.0.Estimatesofglobalannualenergysavingsifproductpolicieswereextendedtocoverenergy-usingsystemsIEA.Allrightsreserved.Note:S&L=standardsandlabels.Source:4ETCP(2022),ProgressingEnergyEfficiencyPoliciesforSystems,asmodifiedbytheIEA.2.3Market-basedinstrumentsEuropeancountriesandtheUnitedStatescontinuetomakemostuseofmarket-basedinstrumentsMarket-basedinstruments(MBIs)arecommonlyusedprogrammesthatspecifyanoutcome,suchasenergysavingsorcost-effectiveness,tobedeliveredbymarketactors,suchasutilitycompanies,withoutprescribingthedeliverymechanisms.MBIsforenergyefficiencygenerallyfallundertwomaintypesofprogrammes:EnergyEfficiencyObligations(EEOs)andAuctionmechanisms.•EEOs-includingwhitecertificateprogrammesandenergyefficiencyresourcestandardsintheUnitedStates-requireobligedmarketactorstocarryoutadefinedlevelofenergysavingswithoutspecifyingthedeliveryroute.Insomecases(e.g.someAustralianstates),governmentsmaydeveloparangeofspecificmethodstodemonstratesavings,andenergyutilitiesorcustomerscanchoosefromtheoptions.Someschemesofferup-frontincentivesbasedonestimateddeemedlifetimesavingswhileothersrequireongoingmonitoringtodetermineregularpayments.•Auctionmechanisms-includingtenderingprogrammesandforwardcapacityauctions-allowmarketactorstobidforfundstodeliverspecificenergysavings.WhilebothformsofMBIshaveincreased,EEOsremaintheoverwhelmingmajority,accountingfor96%ofallMBIs.010002000300040005000EnergysavingsfromextendingproductpoliciestosystemsTWhResidentialheatingCommercialheatingCommercialcoolingStreetlightingColdroomsSteamsystemsFansystemsPumpsystemsCompressedair010002000300040005000USElectricityconsumptionEvaluatedS&Lsavingsin2018(9countries)TWhEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE55IEA.CCBY4.0.Numberofcountrieswithenergyefficiencyobligationsschemes,2000-2022IEA.CCBY4.0.Asof2022,thereare48energyefficiencyobligationprogrammesin23jurisdictions.IntheEU,16countriesarecurrentlyoperatingEEOs,andintheUnitedStatesalone24stateshaveEEOs,calledEnergyEfficiencyResourceStandards(EERS).AnewEEOwaslaunchedinHungaryin2021andcurrentlythereareEEOsunderdevelopmentinKoreaandinBosniaandHerzegovina.OftheEEOsinforce,thevastmajorityencompassmultiplesectors.Only4%ofEEOstargettheresidentialsectorand2%areaimedexclusivelyfortheindustrialsector.InFebruary2022theVictorianEnergyUpgradesEEOinAustraliaexpandedtoincludenewcommercialandindustrialheatpumpreplacement.In2021,Coloradointroducedacleanheattargetbillthatrequirespublicormunicipalutilitieswithmorethan90000retailcustomers,tosubmita‘cleanheatplan’tocutCO2andmethaneemissionsfromdeliveredgastotheColoradoAirQualityControlCommission.InMassachusettsandVermontcleanheatstandardshavebeenproposedthathavecredit-basedperformancestandardsappliedtosuppliersofheatingenergy(primarilygasandoil),obligingthemtoprovidetheircustomerswithgraduallyincreasingpercentagesoflow-orzero-emissionsheat.Auction-basedmechanismsremainlesswidespreadthanEEOs.CurrentlythereareauctionmechanismsintheUnitedStates,Switzerland(industry),Portugal,05101520253020002005201020152016201720182019202020212022NumberofcountrieswithoperatingEEOsOther-SubnationalOther-NationalEU-NationalEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE56IEA.CCBY4.0.Germanyand,mostrecently,Denmark.However,interestinthepotentialofimplementingsuchsystemsisincreasinginGreece,Italy,TürkiyeandtheUnitedKingdom.ThemostrecentenergyauctionschemewasestablishedinDenmarkin2020asapartialreplacementmechanismforanEEO.Thescheme,runbytheDanishEnergyAgency,iscalledtheBusinessPool.Itwasdesignedtodeliverapproximately60%ofDenmark’scurrentEEDenergysavingsobligation.InJune2022,itwasagreedtoadjustthecriteriaofthepoolmakingitmoreattractiveforcompaniestoapplyforgrantsforprojectsthatsaveenergyorCO2,includingtheprioritisationofconversionsawayfromgas.Inordertoaccelerateuptake,thepoolisnolongerauction-basedbutisinsteadafixed-rateapproachwhereapplicationsareprioritisedonafirst-come,first-servedbasis.TherevisedBusinessPoolenteredintoforceon1November,istorununtil2029andhasabudgetofDKK3.5billion(approximatelyUSD520million).India’sPerformAchieveandTradeSchemeThePerform,AchieveandTrade(PAT)schemeisamarket-basedmechanismtoenhancecost-effectivenessofimprovementsinenergyefficiencyinlargeenergyintensiveindustriesandfacilitiesthroughcertificationofenergysavingsthatcanbetraded.PAThasachievedtotalenergysavingsof17.57Mtoe,avoidingabout31MtCO2emissioninitsfirstcycleandabout61.34Mtinitssecondcycle.PATcovers1073designatedconsumers(consumingaround50%ofprimaryenergy)from13energy-intensivesectors.PATCycleSeven,coveringtheperiodfrom2022-23to2024-25,hasanoverallenergysavingtargetof6.627Mtoe.InAugust,theIndianParliamentpassedtheEnergyConservation(Amendment)Bill2022.Akeypartofthisbillistheproposedestablishmentofadomesticcarboncredittradingmarket,whichwouldworkinconjunctionwiththePATscheme.2.4BuildingsBuildings’energydemandtrendfarofftrackfornetzeroemissionsasefficiencyimprovementsslowdownGlobalenergydemandinbuildingsissettobe3%higherin2021ataround130EJcomparedwithlevelsbeforetheimpactofCovid-19.In2020,energyconsumptioninbuildingsfellbyaround1%inresponsetoeconomiccontractionandCovid-19restrictionsinthefirstyearofthepandemic.In2021,demandincreasedbyalmost4%,thehighestyear-on-yearincreaseinover20years.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE57IEA.CCBY4.0.IntheIEA’sNetZeroScenario,energyconsumptiondeclines24%by2030,tolevelsofaround100EJ.Toachievethis,energyefficiencyinresidentialdwellingswouldneedtoimproveatarateofaround5%peryearfrom2020to2030.Thiscompareswithprogressof1.5-2%peryearover2000-2015,andjust0.5%peryearonaverageinthelastfiveyearsofthedecade.Globalbuildingsfinalenergydemandandefficiencyindicator,byscenario,2000-2020IEA.CCBY4.0.NewbuildingcodesareunderdevelopmentwhilemoreexistingonesarebeingupgradedtowardsnetzeroThirty-onecountriescurrentlyhavenewbuildingcodesunderactivedevelopmentinemerginganddevelopingcountries,whichaddedtothe80countriesalreadyfullyoperationalmeansthetotalnumberofcountrieswithcodeswillsooncometo111.Sixty-ninecountriescurrentlyhavemandatoryrequirementswhile11countriesuseperformancestandardssuchasvoluntary,modelcodes,orcity-basedstandards.Approximately85countriescurrentlyhavenoknownbuildingcodesinplaceorunderdevelopment.However,thereisstillmuchworkneededtobedonetoalignwiththeNetZeroScenario,whereallnewbuildingsandretrofitsarezero-carbonreadyby2030.Asacriticalpartofaddressingenergyperformanceofbuildings,energycodessetminimumenergystandardsfornewbuildingsandcanalsotriggerrequirementsformajorrefurbishmentsorrenovationstomeetaspectsofexistingbuildingcodes.Buildingenergycodestypicallyaddressoperationalenergyusebyfocusingonenvelopeperformancestandards,includingforwalls,windows,androofsaswellasmajorend-useenergyservicesequipmentsuchasheating,cooling,lightingandventilation.Intermsofthemostrecentprogress,anewlawcameintoeffectinmid-2021intheRepublicofGeorgiaforenergyefficiencyinbuildingsthatappliesEUDirective0501001502000200520102015202020252030EJBuildingsenergydemandSTEPSNZE01002003004005006007002000200520102015202020252030MJperm2residentialfloorspaceEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE58IEA.CCBY4.0.2010/31/EU.Inaddition,KenyaandTrinidadandTobagohavepublisheddraftenergyefficiencybuildingcodes,buttheyarenotyetinforce.IntheUnitedStates,anumberofstateshavealsoincreasedthescopeandstringencyofmandatoryandvoluntarybuildingenergycodes,includingCalifornia,Massachusetts,Wisconsin,Hawaii,andOregon.Australiannational,stateandterritorialgovernmentshaveagreedtoanupgradetonationalenergyefficiencystandardsfornewresidentialbuildingsthatcoverthebuildingenvelope,fixedappliancesandon-sitegeneration.ThisincludesthebiggestchangetotheNationwideHouseEnergyRatingSchemesinceitbeganin1993.Energyefficiencychangestothecodesarevoluntaryfrom1October2022,withatransitionperioduntil1October2023.Inanefforttoensurebuildingenergycodesarealignedtowardsachievingnetzero-carbonstatus,anewvoluntaryappendixtotheInternationalEnergyConservationCode2021workstowardsprovidingsuchastandard.Forresidentialbuildings,thesupplementaryenergycanbegeneratedthroughlocalprojects,suchason-sitesolarPVarrays.TheUnitedStateshasalsoseenseveralcodesaligntheirstandardstowardsreachingnet-zerocarbon,includingCalifornia’sReachCodesandCaliforniaZEROcodeforcommercialbuildings.TheFrenchCodeRE2020,whichcameintoforce1January2022,includesimprovedmandatorythresholdsforenergyconsumptionandforthefirsttimeaddsmandatorythresholdsforGHGemissions(oneforemissionfromenergyandthesecondforemissionrelatedtoconstruction,includingembodiedemissionsinmaterials).Morethan60countrieshaveupdatedtheirNationallyDeterminedContribution(NDC)toprovidefurtherdetailsontheireffortstodecarbonisebuildingsthroughenergyefficiencyactions,with19mentioningbuildingsforthefirsttime.ThismarksapositivechangeinnationaleffortstoputtogetherpoliciesthatfocusonimprovingenergyefficiencyforbuildingsthroughtheUNFCCC.Withcitiesgrowinginsize,theareaofbuildingsneedingtobecooledorheatedsettoexpandbymore20%by2030.Giventhat80%ofthisgrowthisexpectedinemerginganddevelopingcountries,itwillbeimportantforbuildingcodestocoverthe20%shareoftheglobalpopulationlivingincountrieswithNDCsthatdonotcurrentlymentionbuildingsaspartoftheirclimateactionefforts.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE59IEA.CCBY4.0.Globalstatusofbuildingenergycodesin2022IEA.CCBY4.0.TheincreasingroleofbuildingcodesincoolingAnumberofbuildingcoderevisionsareincreasingtheirfocusonaddressingcoolingstandardsduetotheoutlookforincreasedcoolingdemandamidhigherclimate-relatedtemperatures.Recentlyrevisedzero-carbonalignedbuildingenergycodesintheUnitedStateshaveclearlysetoutcoolingdemandreductionasabasisfortheimprovements.Forexample,bothMaryland’sBuildingEnergyTransitionPlanandVermont’sBuildingCodeRoadmaphavespecificallynotedthatbuildingcodeimprovementswillreducecoolingthermalenergydemandintensityaspartoftheirnet-zerobuildingstrategies.ThelatestversionoftheInternationalEnergyConservationCode(IECC)hasoptionalperformancestandardsforcoolingequipment.Forexample,anair-sourceheatpumpshouldhaveaSeasonalEnergyEfficiencyRatio(SEER)of16andaground-sourcesystemacoefficientofperformance(COP)of3.5.Largelycooling-dominantcountries,suchasSingapore,havealsotargetedcuttingcoolingenergyconsumptionthroughtheirSuperLowEnergyBuildingTechnologyRoadmap,whichincludestacklingequipmentalongsideenvelopeperformancethroughcoolingsurfacesandstrategiestoreduceheatgains(e.g.shading)aswellasincreasingtheheatreductionperformancestandardsfortheirGreenMarkGold.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE60IEA.CCBY4.0.2.5IndustryIndustrialdemandispushingglobalenergyconsumptionhigherasintensityprogressslowsGlobalindustrialenergyconsumptionhasexperiencedstronggrowthsincethebeginningofthepandemic,rising4%from2019toabout165EJin2021.Thiscontinuedthetrendofincreasedindustrialenergyuseconstitutingalargershareoftotalfinalenergydemand,whichhasrisenfrom33%in2000to38%in2022.Globalindustrialfinalenergydemandandenergyintensity,byscenario,2000-2022IEA.CCBY4.0.Threeheavyindustries–chemicals,steelandcement–accountfornearly60%ofindustrialenergydemand,withemerginganddevelopingeconomies,inparticularChina,responsiblefor70-90%oftheoutputofthesecommodities.IntheNetZeroScenario,economicgrowthinEMDEsisexpectedtocontinuetodriveindustrialenergyconsumptionhigher,withoutputofthesethreecommoditiesexpectedtorise21%,9%and5%,respectively,by2030.Overall,industry,whichcurrentlyaccountsforaroundone-quarter,or9.4Gt,ofglobalenergy-relatedCO2emissions,isnotontracktomeetthemilestonesintheNetZeroEmissionsto2050Scenario.Inadditiontoothermeasures,thiswouldrequiretheenergyefficiencyoftheindustrysectortoimproveatarateof3%perannum,fromaround4MJperUSDofindustrialvalueaddedin2020to3MJin2030.Thiscomparestothecurrentrateofimprovementsofaround1%peryear.Anadditionalchallengeforthispathwayisthat,whilehydrogenenablestheuseofrenewablesourcesforhightemperatureprocesses,ithasalowefficiencyinproductionleadingtoanincreaseofindustrialenergyconsumption,albeitdecreasinggreenhousegasemissions.02462000200520102015202020252030MJperUSDindustrialvalueadded0501001502002000200520102015202020252030EJIndustrialenergydemandSTEPSNZEEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE61IEA.CCBY4.0.Efficiencyisrisingfastestinthelessenergy-intensiveindustrialsectorsinIEAcountriesInIEAcountries,energyefficiencyprogressinlessenergyintensivemanufacturinghasbeenimprovingfasterthaninheavyindustry.From2000to2020,thetextileandtransportequipmentsub-sectorsachievedthegreatestimprovementinenergyintensityat47%each,followedbytheproductionofmachineryat46%andothermanufacturingat43%.Foodmanufacturingperformedrelativelypoorlyincomparison,withanenergyintensityimprovementof6%overthis20-yearperiod.Heavyindustrysawsmallerimprovementsinenergyintensityoverthepasttwodecades,withchemicalspostingthestrongestgainsat38%,followedbynon-metallicmineralsat23%,metalsat21%,andpaperandprintingat18%.Annualaverageimprovementshowsthegainsforchemicals,non-metallicminerals,andmetalsaveraged1-2%over2010-2020.Inlessenergy-intensivemanufacturing,annualefficiencyimprovementsaveraged2-4%peryearoverthesameperiod.Averageenergyintensityofmajorindustrialsub-sectors,inIEAcountries,2000-2020IEA.CCBY4.0.A2022globalsurveyofover2200industrialcompaniesin13countriesshowedthat97%werealreadyinvestinginenergyefficiencyorplanningto,89%expectedtoincreasetheirinvestmentinenergyefficiencyoverthenextfiveyearsand52%aimedtoachievenetzerowithinfiveyears.0102030BasicmetalsNon-metallicmineralsChemicalsPaperandprintingManufacturingFoodTextilesRubberOthermanufacturingMachineryTransportequipmentHeavyindustryLessenergyintensiveindustryMJ/USDPPP201520200%1%2%3%4%5%Annualaverageimprovement2000-20102010-2020EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE62IEA.CCBY4.0.China’sreformforthesteelindustryThetransformationofthesteelindustrywaslistedasamajorgoalinChina’snational14thFive-YearPlan(2021-2025).Thisisakeyairpollutionpreventionpolicythatwillrequireironandsteelenterprisestomerge,restructureandupgradeequipment,improvetheoverallgreenandlow-carbondevelopmentofthesteelindustry,leverageeffectivesocialinvestment,andhelpstabiliseeconomicgrowth.FromJanuarytoJuly2022,251enterprisesand681Mtofcrudesteelproductioncapacityhadcompletedorwereimplementingultra-lowemissiontransformation.Accordingtothelateststatistics,albeitincomplete,thecumulativeinvestmentinultra-lowemissiontransformationofironandsteelenterprisesnationwidehasexceededCNY150billion(aboutUSD21billion).DatareleasedbyChinaSteelAssociation,shows800Mtofsteelcapacitytransformationprojectswillbecompletedby2025(upfrom400Mtnow),withabout400Mtstilltobeimplemented.BasedonanaverageinvestmentofCNY360(aboutUSD50)pertonneofsteel,theadditionalinvestmentwillbenolessthanCNY150billion.InterestandengagementinenergymanagementbestpracticesgrowingWithhigherenergypricesandinflationarypressuresupendingbusinessoperationseverywhere,companiesareincreasinglyturningtoenergymanagementsystems(EnMS)toachievecriticalcostsavings.Theyessentiallyprovideaframeworkofproceduresandbestpracticestoensurethesystematicplanning,analysis,control,monitoringandimprovementofenergyuseandefficiency.ThedeploymentofanEnMScansignificantlyreduceenergyconsumption,improveenergyefficiencyandincreasevisibilityofenergyuseandspendforcompanies.TheadoptionandgrowthofenergymanagementsystemsistypicallytrackedbycomparingtheannualuptakeofinternationalstandardsandthenumberofcertificationsissuedpublishedinannualsurveybytheInternationalOrganizationforStandardization(ISO).Themaininternationalindustrialenergymanagementsystemstandard,ISO50001,wasestablishedin2011,andthenrevisedin2018.Dataisgatheredonglobalcertificationlevelsonanannualbasis.Anewstandard,ISO50005,waslaunchedinSeptember2021toprimarilytargetsmall-andmedium-sizedbusinesssectorsandcompaniesthatmayhavelimitedresourcestoputinplaceacomprehensiveenergymanagementsystem.ThissimplifiedstandardallowsforaphasedapproachinimplementingasystemtoEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE63IEA.CCBY4.0.monitorandimproveenergyperformance,whichcanthenlaterbeusedtowardsmeetingthemorestringentrequirementsofISO50001.Amidthecurrentenergycrisis,thenewEnMSstandardwillenableanincreasingnumberofcompaniestobettermanageenergyuseandimproveefficiencylevels.Asyet,nodataoncertificationuptakehasbeenpublished.ISO50001certificationsissuedinselectedregions,2018-2021IEA.CCBY4.0.Sources:IEAbasedondatafromISO(2022),ISOSurveyofCertifications,2021.In2021,thenumberofnewISO50001certificatesissuedroseby11%overyear-agolevels.ThemostsignificantincreasewasinAsia,upby37%,followedbyASEANcountriesat21%.Germany,thecountrywiththehighestnumberofcertifications,droppedby15%toafour-yearlow.Certificateswereawardedineightnewcountries,bringingthetotalnumberofcountrieswherethestandardisbeingimplementedto108.CertificateswereissuedtoMongolia,Montenegro,Tanzania,Jamacia,Ghana,Gabon,ZambiaandtheCôted’Ivoire.WhileISO50001iswidelyused,itisneitheruniversalnoruniqueintermsofenergymanagementsystemsforindustry.AnalysisofthemostrecentquadrennialManufacturingEnergyConsumptionSurvey(MECS)carriedoutbytheUSEnergyInformationAdministrationhighlightedthatalmosthalf(48%)ofallmanufacturingestablishmentsparticipatedingeneralenergymanagementactivities,farexceedingthosegoingthroughtheISO50001certificationprocess(3%).However,thatthesurveyalsoshowedthatenergysubmeteringoftheindividualindustrialprocesseswaslow(8%),highlightingalackofdedicatedmonitoringandtargetingsystems,essentialforeffectiveenergymanagementandsustainedenergyefficiency.0100020003000400050006000700080009000GermanyRestofEuropeAsiaMiddleEastandEurasiaNorthAmericaASEANOtherAnnualnumberofcertificationsawarded2018201920202021EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE64IEA.CCBY4.0.ReportedenergymanagementactivitiesintheindustrialsectorintheUnitedStates,2018IEA.CCBY4.0.Sources:IEAbasedondatafromU.SEnergyInformationAdministration,(2021),MECS.Electricmotorsystemsuseabout70%ofelectricityinindustry,butmoreefficiencystandardsneededElectricmotorsandmotor-drivensystemsaccountforaround70%ofthetotalglobalelectricaluseoftheindustrialsector.GovernmentsuseInternationalEfficiency(IE)standardstospecifyefficiencylevelsfortheminimumenergyperformanceoflowvoltage(AC)motors.TheIEstandardshavefourdistinctlevels,rangingfromIE1toIE4or“super-premiumefficiency”motors.In2022,57countrieshaveMEPS(minimumenergyperformancestandards)forindustrialelectricmotorsinplace,coveringabout50%oftheglobalelectricityconsumptionofindustrialmotors,upfrom20%tenyearsago.ThewidelyacceptedIEefficiencyclassesforelectricmotorsfacilitatethefurtherimplementationofMEPS,creatingleewaytofurthersignificantlyincreasepolicycoverageofmotorselectricityconsumption.Ukraineisthemostrecentcountrytointroducestandards,whichcameintoeffectin2021.Whilemostgovernmentsonlyregulatenewmotors,PakistanintroducedMEPSandlabelsforrefurbishedsecond-handmotorsin2021.Startingasavoluntaryprogramme,itwilleventuallytransitiontocompulsoryregistrationandIE3minimumperformancerequirementsin2023.0%10%20%30%40%ImplementingISO50001ConductenergyauditsEnergyusebaselineImprovementgoalssetAssignedresponsibilityforenergymanagementSubmeteringPercentageofsitesimplementingtheenergymanagementmeasureAllmanufacturingindustriesHeavyindustryLightindustryEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE65IEA.CCBY4.0.Sincemid-2021,ChinaandColombiahaveextendedthenumberofproductcategoriesrequiredtomeettheIE3efficiencylevel.IntheEU,UnitedKingdomandSwitzerlandfrom2023onwards,somemotortypeswillhavetomeettheIE4SuperPremiumrequirements.Currently,11countriesmakeuseofmandatorycomparativelabelstoincentivisesalesformoreefficientindustrialmotors,buteightadditionalcountriesoffervoluntarycomparativeorendorsementlabelling.Variouscountrieshaverecentlystrengthenedlabellevelsandextendedscope.In2022ThailandadoptedHighEnergyPerformanceLabelsfor1phasemotors,3phasemotorsandVariableSpeedDrives(VSDs),onavoluntarybasis.Potentialmotorsystemenergyreductioninselectedindustrysectors,intheUnitedStatesIEA.CCBY4.0.Source:IEAbasedondatafromLBNL,(2022),U.S.IndustrialandCommercialMotorsystemsMarketAssessmentReport.Volume3:EnergySavingOpportunity.Note:VFDisvariablefrequencydrive.AninvestigationintotheenergyefficiencyopportunitiesofindustrialmotorssystemsintheUnitedStatesfoundthatthetopfourenergysavingmeasureswereinstallingVariableFrequencyDrives(VFDs)forprocesseswithvaryingloads,usingadvancedtechnologies(permanentmagnet),upgradingtopremiumefficiencymotorsandimprovingdistributionsystem.2.6TransportTransportenergydemandisrecoveringbutremainsbelowpre-Covid-19levelsTransportwasthesectormostaffectedbyCovid-19restrictions,withenergyconsumptionfallingby14%in2020andreboundingby8%in2021,whichisstill0%2%4%6%8%10%12%14%16%18%EstimatedindustrialaverageChemicalsPrimarymetalsFoodPaperPlasticsandrubberPetroleumrefiningPotentialenergyreductionVariablefrequencydriveAdvancedtechnology(PM)PremiumefficiencymotorupgradeDistributionsystemimprovementsEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE66IEA.CCBY4.0.wellbelowlevelsin2019.Whileelectrificationisgatheringpace,oilproductsstilldominatethesector,providingaround91%ofitsfinalenergyuse.Roadtransportmakesuparound75%ofenergydemandandemissions.PriortoCovid-19,energyconsumptioninthesectorwasgrowingatanaverage2%peryearfrom2000-2019.IntheNetZeroScenario,transportenergydemandisaround100EJin2030or22%lowerthanwhatisexpectedwithexistingpolicies.AspartoftheshifttoNetZeroEmissions,theshareofoilinfinaldemandfallsto80%in2030.Thisunderscoresthecontinuedimportanceofimprovingtheefficiencyofinternalcombustionenginevehicleswhichstillmakeuparound80%oftheglobalfleetby2030,includingviahybrids.Globaltransportfinalenergydemand,2000-2021,andbyscenario,2030IEA.CCBY4.0.Theaverageannualimprovement(reduction)inenergyconsumedperpassengerkilometretravelled(specificfuelconsumption)from2000to2020ofcarsandlighttruckswas1.7%,followedbytwo-andthree-wheelersat0.8%andbusesat0.8%.ToreachlevelsconsistentwiththeIEANetZeroScenario,averageefficiencyimprovementswouldneedtorisetoaround4.5%peryearforlight-dutyvehiclesandtwo-wheelersand3%fortrucks.Pastimprovementsweredrivenbyanincreaseintheshareofelectricvehiclesinfleets,continuedimprovementsinenginetechnologyandtheintroductionofhybridpowertrains.0204060801001201402000200520102015202020252030EJTransportenergydemandSTEPSNZEEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE67IEA.CCBY4.0.Globalroadtransportefficiencyindicators,2000-2020,andintheNetZeroScenario,2030IEA.CCBY4.0.VehiclefueleconomystandardsandincentivesarebeingstrengthenedTheEU’sFitfor55emissionreductiontargetsfornewcarsandcommercialvehiclesaimstospeedupthetransitiontozero-andlow-emissionmobility.Anewtargetofa100%reductionfor2035hasrecentlybeenintroduced,meaningallnewcarsorvanssoldintheEUfrom2035willbezero-emissionvehicles.AspartoftheEUFitfor55programme,theAlternativeFuelsInfrastructureRegulation(AFIR)setstargetsforthedeploymentof(re)chargingandhydrogen(re)fuellinginfrastructureforcars,vans,trucksandbuses.Italsosetstargetsfordeployinginfrastructuretoprovideelectricitytoships,inlandwaterwayvesselsandaircraftwhenthesearestationary.IntheUnitedStates,astrengtheningofCorporateAverageFuelEconomy(CAFE)standardswasenactedbythegovernmentin2022.CAFEstandardsrequireanindustry-widefleetaverageofapproximately49mpgforpassengercarsandlighttrucksinmodelyear2026.Thenewstandardswillincreasefuelefficiencyby8%annuallyformodelyears2024-25andby10%annuallyformodelyear2026.Theywillalsoincreasetheestimatedfleetwideaveragebynearly10mpgformodelyear2026,relativetomodelyear2021.InCaliforniaaUSD10billionzero-emissionvehicle(ZEV)packagetoacceleratethetransitiontozero-emissionvehiclesandfightclimatechangewasannounced.Significantinvestmentsareearmarkedforzero-emissionvehiclesandinfrastructureforuseinlowerincomeneighbourhoods;heavy-dutyzero-emissionvehiclesandsupportinginfrastructure;zero-emissionmobility(sustainablecommunity-basedtransportationequityprojectsthatincreaseaccesstozero-LightdutyvehiclesTwoandthreewheelersBuses0.00.51.01.52.02.52000201020202030NZEMJperpassenger-km0.00.51.01.52.02.52000201020202030NZE0.00.51.01.52.02.52000201020202030NZEEnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE68IEA.CCBY4.0.emissionmobilityinlow-incomecommunities);andemergingopportunities(e.g.off-roadapplications,andvehiclegridintegrationatscale).InChile,thefirstenergyefficiencylawwasenactedinFebruary2021,whichmandatesfueleconomystandardsfornewvehicles.Thestandardforlight-dutyvehicleswaspublishedinFebruary2022andcallsforcompliancefromimportersandmanufacturersby2024.Fromabaselineof14.9km/Lgein2020,thetargetis18.8km/Lgefrom2024to2026,increasingto22.8km/Lgein2027andto28.9km/Lgein2030.Formedium-dutyvehicles,thestandardswillbedefinedin2024,takingeffectin2026.Theheavy-dutyvehiclestandardswillbedefinedin2026,takingeffectin2028.InNewZealand,theCleanVehicleStandardwaspassedin2022andwillcomeintoeffectin2023.In2023,lightpassengervehiclesmustmeetastandardof145gCO2e/km,whilelightcommercialvehiclesmustnotemitmorethan218gCO2e/km.Thesestandardswillincreaseinstringencyto63.3gCO2e/kmand87.2gCO2e/kmin2027forlight-dutypassengerandlightcommercialvehicles,respectively.Additionally,NewZealandisthelatestcountrytoestablishafeebateprogramme.ThecountryintroducedarebateforBEVsandPHEVsinJuly2021andexpandedtheprogrammetoafullbonus-malusschemeinApril2022,whichappliestonewandusedimportedpassengercarsandlightcommercialvehicles.InApril2022,NewZealand’sVehicleFuelEconomyLabellingschemeupdateditslabeltonowincludeCO2emissionsdataandeasier-to-understanddataoncostsavingsandrebates.Onthe1stNovemberthegovernmenthasalsoagreedanNZD569millionCleanCarUpgradeprogramme,anequity-orientedpilotandrolloutofascrap-and-replacescheme,whichwillprovidetargetedassistancetolower-andmiddle-incomehouseholdstoshifttolow-emissionsalternativesuponscrappingtheiroldvehicle.ChinabeganofferingincentivesforEVsin2009aspartofthe“TenCities,ThousandVehicles”pilotprojectsinitiative.Subsequentexpansionprogrammeshavebeencreditedwithcreatingtheworld’slargestEVmarket.Thesubsidieswereduetoexpirein2022,buthavebeenextendedtoDecember2023.InMalaysia,aseriesoftaxincentiveswaslaunchedinJanuary2022tobenefitmanufacturersandpurchasers,includingtaxexemptionsforimportsandsales,aswellastaxreliefforthoseowninganelectricvehicle.InMay2022,Thailandannouncedmeasurestoimplementelectricvehicletaxandcustomsincentivesfor2022-25.TheseaimtoequalisethepurchasecostofelectricversusICEvehicles.SinceOctober2021Indonesiahaslevieddifferingmotortaxationratesformanufacturersdependingonthevehicle’semissions.Thetaxrateforelectricvehiclesis0%,hybridvehicles2%to12%,andforfossil-fuelledvehiclesrangingfrom15%to40%.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE69IEA.CCBY4.0.SalesofmoreefficientandelectriccarsareincreasingWhileglobalcarsalesinthefirsthalfof2022werelowerthanthoseof2021,salesofmoreefficientcars,andespeciallyelectricvehicles,wereperformingrelativelystronglycomparedwithlessefficientpetrolanddieselcars.IntheUnitedStates,salesofEVsincreasedby60%inthefirstthreemonthsof2022,inspiteofanoveralldeclineintheUScarmarketofnearlyone-fifth.InIreland,adoublingofnewEVregistrationsinearly2022(comparedtothesameperiodin2021)hasbeenattributedtohighfuelprices,supportedbychangesinvehicletaxes.Reportsfromdealerssuggestedanincreaseininterestformorefuel-efficientcarsintheUnitedStatesandUnitedKingdomwiththeimpactofhighenergypricesalsoreflectedinsearchesrelatingtopurchases.Inmid-March2022onlinesearchesforEVsintheUnitedKingdomincreasedbynearly40%week-on-week,takingthesetolevelsthatwere150%morethaninthecomparableweekin2021.IntheUnitedStates,thenumberofsearchesincreasedby40%month-on-month,correspondingwithresearchatthestartof2022whichsuggestedthatnearlyaquarterofUSmotoristswouldconsiderswitchingtoanEViffuelpriceskeptincreasing.Averagemonthlychangeingrowthofcarsalesbyvehicletype,2019-2022IEA.CCBY4.0.2022%growthusingmonthlyaverageacrossJanuary-August.Source:IEAanalysisbasedonMarklinesdata.Globally,over3millionhybridshavebeenpurchasedsofarin2022,makinguparound8%ofsales.TheyhaveplayedakeyroleinEurope,wheretheirproportionoftotalsalesincreasedfromaround5%attheendof2020toalmost20%inthefirsthalfof2022.-1200012002400360048006000-30%0%30%60%90%120%150%202020212022202020212022202020212022ElectriccarsHybridcarsPetrolanddieselcars%growthinsales(leftaxis)Averagemonthlysales(rightaxis)EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE70IEA.CCBY4.0.Mildhybridsassisttheengine,makingitmorefuelefficientandcanofferuptoa15%reductioninCO2emissionscomparedwithconventionaltechnologies.Fullhybrids,ontheotherhand,usethecombustionengineandelectricmotorstodrivethecarsimultaneouslyorindependently,whichresultsingreaterCO2savingsofupto30%.Theseelectricmotorsarenotpluggedinbutarechargedthroughtheoperationofthecombustionengine.Electrificationhasalsobeengrowinginothertransportmodes.Salesofelectricbusesincreasedby40%in2021andelectrictrucksalesmorethandoubled.Chinaaccountedforover90%ofthesesales,althoughregistrationsinEuropeandtheUnitedStatesalsoincreased.Electricmedium-andheavy-dutytrucksales,however,representedlessthan0.3%ofthetotalnumberofregistrationsformedium-andheavy-dutyvehiclesworldwide.In2021,46%ofcarssoldwereSUVs,up2%fromthepreviousyear.In2010,just17%ofcarssoldwereSUVs.From2010to2019,newlight-dutycarsbecame6.2%heavierwhenconsideringthesales-weightedaverage,20%morepowerfulandhada7%largerfootprint.AkeycauseofthistrendhasbeenashiftfromcarstoSUVsandlighttrucks.Increasingvehiclesizeandpowerhaserodedasmuchas40%ofthefuelconsumptionimprovementsthatwouldotherwisehaveoccurredthankstotechnicaladvancesinvehiclesandengines.Abouthalfoftheelectriccarmodelsavailableinmajormarketsin2021wereSUVs,faraheadofsmall(10%)ormedium-sizemodels(23%).SUVsandluxurymodelstypicallygeneratemuchlargerprofitmargins,whichisonereasonwhyautomakerspromotethemandboostsupply.2.7SystemlevelenergyefficiencyElectrificationandgrowingshareofrenewablepowerrequireefficiencypoliciestargetedatthesystemlevelTheshareofelectricityinthetotalenergyconsumptionhasbeensteadilyincreasingoverthelasttenyears,risingfrom15%in2000to20%in2020.Aspartofthetransitiontomeetnetzerogoals,arapidincreaseinelectricitydemand,fuelledbyrenewableenergy,isneededtopowerfuelswitchingfrominternalcombustionenginestoelectricvehiclesandfromgasheatingtoheatpumps.However,ifunmanaged,thisadditionalelectricitydemandwillplacehugestrainsonthepowersystems.Thisisespeciallytrueinsystemswithincreasinglevelsofvariablerenewableenergysources.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE71IEA.CCBY4.0.Shareofelectricityinglobalfinalenergyconsumption,bysector,2000-2020,andintheNetZeroScenario,2030IEACCBY4.0.Increasingtheflexibilityofelectricitydemandwillprovidebenefitstotheelectricitygrid.Energyefficiencyanddemand-sidemeasuresareincreasinglyaboutreducingpeakpoweruse,andshiftingpowerconsumptiontowardthetimeofmaximumrenewableproduction.Digitalisationplaysanimportantroleinenablingthisthroughmoregranulardata,newwaysofanalysingdataforbetterinsightsandgreatervisibilityontheperformanceandcapacityofassets.Forinstance,digitalisationallowsmorecontrollabilityandadjustabilityofoperations,enablingconsumerstoreacttosignalssentbythepowersystem.Asautomationdiminishesthecostofreactingtoapricesignal,itmakesitmucheasierforsmallersourcestoparticipateinmarketsforflexibility.Thiscaninturnprovidepowersystemservices,suchasreducinggridcongestionandenhancingresilience.Toolssuchasdigitaltwinscanalsohelptargetenergyefficiencyeffortstoreducepeakdemandandthestrainonpowersystems.Forexample,AdgerEnergi,aNorwegianelectricutility,isusingdigitaltwinstoidentifywaystooperateitselectricalgridmoreefficientlythroughdistributedenergyresources,devicecontrols,andpredictiveforecasting—thusavoidingcostlyandtime-consumingnetworkreinforcementandinfrastructureupgrades.InEurope,theenergycrisishasbroughtarenewedpushtowardsmarketdesignoptimisationandpowersystemflexibility.TheEuropeanCommissionpresentedexceptionalelectricitydemandreductionmeasures,withtheaimofreducingelectricityconsumptionbyatleast5%atpeakhours,andoveralldemandby10%.Reducingdemandatpeaktimeswouldleadtoareductionofgas0%10%20%30%40%50%200020052010201520202030NZE200020052010201520202030NZE200020052010201520202030NZE200020052010201520202030NZETFCTransportIndustryBuildingsShareofelectricityinTFC%EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE72IEA.CCBY4.0.consumptionby1.2bcmoverthewinter.AccordingtoENSTSO-E,a5%peakshavingcouldhelpmitigatemostofthereliabilityrisksincontinentalEuropethiswinter.TheforthcomingEUDigitalisationofEnergyActionPlanisexpectedfurtherpromoteharmonisationofrulesandsupportforsolutionstowardsmoreflexibledemandandsystemsefficiency.Toavoidasituationthiswinterwherecolddaysincombinationwithlowlevelsofwindcouldnecessitatetheinterruptionofsupplyforcustomers,theUKNationalGridESOinNovemberlaunchedanewprogramme,DemandFlexibilityService,todelivermorethan2GWdemandresponsewhenneeded.Theoperatorhasdevelopedthisprogrammeinclosecoordinationwithsuppliers,aggregators,industry,OfgemandBEIS,andelectricitycustomers.UKregulatorOfgemestimatesthataround30GWoftotallowcarbonflexiblecapacityin2030and60GWin2050willbeneededtomaintainenergysecurityandcost-effectivelyintegratehighlevelsofrenewablegeneration.TheUKSmartSystemsandFlexibilityPlan2021estimatesthatthedomesticmarketforthedevelopmentofintelligentsystemsandflexibilitysolutionsin2050willbeworthmorethanGPB1.3billionperyearandcreatemorethan10000jobs.InIndia,extremeweathereventsin2021and2022highlightedtheenergysecurityrisksofclimatechange.Forexample,the2022heatwavescreatedunprecedentedspikesinpeakdemandfromairconditioningandfans,causingpoweroutagesformillionsandleadingtoplanstoboostcoalproductionby100Mtoverthenextthreeyears.Moreefficientandsmartercoolingsystemsanddemandresponseplaysanessentialroleinmitigatingpeakdemandandavoidingoutages.Increasingly,policyisfocusedondevelopingapproachestoencouragesystemsefficiency.Forinstance,Californiahasestablisheda“loadingorder”thatcallsforfirstpursuingallcost-effectiveefficiencyresources,thenusingcost-effectiverenewableresources.Onlythenmayconventionalenergysourcesbeusedtomeetnewload.Agrowingnumberofcountrieshaveopenedtheirflexibilitymarkettodemandresponse.Japan’sMinistryofEconomy,TradeandIndustry’s(METI)AgencyforNaturalResourcesandEnergyhasoutlinedastrategicplanwithaheavyfocusondemand-sidemeasures.Newframeworksarebeingputinplacetoallowlargeuserstoberewardedforoptimisingtheirenergydemandinresponsetothefluctuationofenergysupply.Greatersophisticationofthesecondaryenergystructure,includingeffectiveuseofdistributedenergyresourcessuchasbatteries,isbeingtargeted,specificallypromotingaggregationbusinessesutilisingtheseresources.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE73IEA.CCBY4.0.EarthquakeinJapanandemergencyreductioninenergydemandInMarch2022,amagnitude7.4earthquakeintheTokyoElectricPowerCompany(TEPCO)regionledtoseveralthermalpowerplantsgoingofflineandasuddenreductionintransmissioncapacity.AsubsequentsurgeinelectricitydemandduetounusuallycoldweatherresultedinthehighestdemandinMarchsincetheGreatEastJapanEarthquakein2011.Inaddition,solarpowergenerationdecreasedsignificantlyandtheelectricityreservemarginintheregionwasexpectedtofallwellbelow3%,toaslowas0%inTokyo.METIissueda“powercrunchalert”tosaveelectricityuseontheeveningof21March.Inthefirstsuchalertsince2012,transmissionoperators,retailcompaniesandlocalgovernmenturgentlycalledforcompaniesandcitizenstoreducetheirelectricityuse,includingdemandresponse.Over21-22March,theTEPCOtwicerequestedthatend-userssavepower,communicatingviaLINE,apopularmessengerapplicationwith2.5millionJapaneseaccounts.TEPCOurgedhouseholdstosettheheatingtemperatureto20°Candtoturnoffunusedlights.Inaddition,TEPCOinformedusersofthepossibilityofapoweroutageforupto3millionhouseholdsandemphasisedtheneedforurgentactionstosave2millionkWh.AsaresultofvigorousenergyconservationeffortsintheTokyoandTohokuregions,44GWhofelectricitywassavedon22March,achieving70%ofthemaximumsavingstarget.Assupplyreinforcementmeasuressuchasin-housepowergenerationandincreasingthermalpoweroutputwerecarriedoutatthesametime,powersupplyanddemandconditionswerestabilisedinthemorningofMarch23.InSouthAfrica,in2022thetotalnumberofhoursofnationalrollingblackoutsmorethandoubledfrom1150to2400hoursasaresultofaginginfrastructureandenergysystemstrains.Aspartoftheresponsetotheenergycrisis,theStandardOfferProgrammeisbeingusedtopurchaseenergysavingsfromenergyefficiencyprogrammes,includingefficientlighting,hotwaterandsolarsystemsandindustrialprocessoptimisation.Thisallowsforadynamicpriceoptionwherethevalueofenergysavingsissetday-aheadforeachhourofthefollowingday,takingintoaccounttheavoidedcostofgeneration.Meanwhile,theUnitedKingdomlaunchedaprogrammeforenergysmartappliancestotestinteroperabledemandresponse,includingthroughsmartmetersandenergymanagementsystems.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE74IEA.CCBY4.0.GrowthinthestockofsmartmetersisenablingmoresophisticatedoptionsforenergyefficiencyactionsSmartmeterdeploymentisontherise,openingupnewopportunitiestoharnessenergyefficiencyanddemandresponseatthesystemlevel.Smartmeterdata,associatedwithotherdataseriessuchasweatherandproduction,canalsobeusedtogenerateinsightstobalancerenewableenergysupplyagainstdemandprofilesandfacilitatecorrectsizingofheat-networks,heatpumpinstallationsandenergystorageoptions,includingEVinfrastructure.Buildingsarecapableofprovidingawiderangeofflexibilityservicestothegridwithoutcompromisingonenergyneedsofconsumers,iftheyhavetheabilityinteractwiththegridthroughvariousdigitaltoolsanddevices,suchassmartmetersandsmartautomationandcontrolsofmainbuildingenduses.Globally,in2021,thestockofsmartmeterswasabout1billionandisexpectedtogrowto1.6billionunitsby2030.Whilesomecountrieshavereachedfullrollouts,others,especiallyindevelopingandemergingeconomies,arestillintheinitialstagesofdeployment.InvestmentsinelectricitynetworksinEMDEsfell15%in2020-21,toaround60%ofthe2015-16averagelevel.Overall,EMDEinvestmentsinsmartmeterstotalledlessthanUSD2billionperyearoverthepastfiveyears,whileadvancedeconomiesspentoverUSD10billionannually.Byenablingthecollectionofgranularconsumptiondata,smartmeterscanhelpgatherimprovedinsightsintoconsumptionpatternsandfactors.Thiscanthenbeusedtoimproveenergyefficiencyprogrammes,orharnessdistributedflexibilityfromconsumers.However,smartmeterscanonlyrealisetheirfullpromiseiftheyarecomplementedbyanenablingenvironment,whichincludesgooddatainfrastructure,compatiblecommunicationprotocols,energymanagementsystemorconnectedappliances,marketssendingtherightincentives,andproperconsumerengagement.Beyondsmartmeters,furtherdeploymentanduseofdigitaltechnologiescancreateefficientgrid-interactivebuildingsthatcansendsignalstoandreceivesignalsfromthegridtorespondtoitsbalancingneedsatagivenmomentintime.Byrespondingtothesignalfromthegrid,suchbuildingscandynamicallyadjusttheirenergyconsumptionbyshiftingenergyusefrompeakdemandhourstoatimewhenelectricityisthecleanestorbystoppingelectricityuseforshortperiodsoftimestoreducethepressureonthegridwithoutnoticeableadverseimpactsonthequalityofenergyservicestoconsumers.EnergyEfficiency2022Chapter2.PolicyandtechnologyPAGE75IEA.CCBY4.0.Globalsmartmeterstock,2010-2030IEA.CCBY4.0.Notes:MetersareconsideredsmartiftheyincludeIntegratedonboarddatastorageandprocessing,enablingenergyreadingsatfrequentintervals(atleastoncehourly)andintegrated,two-waycommunicationsbetweenthemeterandautility’sITsystems,enablingremotereadingandcontrol(remotedisconnect-reconnect)ofthemeter.Theprojected2030valueiswhatisexpectedunderascenarioofcurrentpolicies.Sources:IEAanalysisbasedonGuidehouse(2022)andBloombergNEF(2017).Ifbuildingsareequippedwithsystemstogeneratetheirownelectricity,suchasusingrooftopsolarPV,thentheiron-siterenewableelectricityproductioncanbealsomanageddependingontheinformationcomingfromthegrid.Theexcessofproducedrenewableenergycanbedirectedtotheusersthatneeditortoavailablestoragefacilitiestobedispatchedlater.Therearemanysuchbuildingsnowunderconstruction.Forexample,theNationalUniversityofSingaporehasconstructedanet-zeroenergybuildingbycombiningasuper-efficientinnovativehybridcoolingsystemwithrooftopsolarwhichenablesthebuildingtofeedtheir30%surplusenergytothecampusgridtopowerneighbouringbuildingsduringthedayandtoprovideelectricitybacktocoverdemandatnights.050010001500200020102012201420162018202020222030SmartMeterstock(millions)EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE76IEA.CCBY4.0.Chapter3.Energyefficiencyandtheenergycrisis3.1ReducingbillsandfightingenergypovertyEnergysavingsfrompastefficiencyactionsareloweringenergybillsbyUSD680billionthisyearinIEAcountriesEnergyefficiencymeasuresadoptedbeforethecrisisaredeliveringsignificantenergysavingsforconsumerstoday.Asenduseenergypriceshaverisen,thevalueofthesepastefficiencyactionshasgoneup.Forexample,since2000,withinthe31IEAmembercountriesaloneenergyefficiency-relatedmeasuresthathavedeliveredenergysavingsofjustover1EJperyearacrossthebuildings,transportandindustrialsectors.Thismeansthatby2020around24EJoffinalenergydemand,or16%ofcurrentlevelsofabout140EJ,werebeingavoidedthankstoenergyefficiency.Thankstomoreefficientcars,buildingsandindustrialfacilities,energydemandhasstayedrelativelystableatjustunder140EJdespitea40%increaseinrealGDPforIEAcountriesasagroup.Thisincludesamuchhighernumberofpassengerkilometrestravelled,floorareainbuildings,andvalueaddedintheindustrialandservicessectors.Atthesametime,overallstructuraleffectshavebeenrelativelysteadycontributingonlyaminordeclinetooverallenergyconsumption.Ifhouseholdsandbusinesseshadusedthis24EJofenergyinsteadofsavingit,theirbillswouldhavebeenaroundUSD680billionhigherthisyear(basedon2022energyprices)around15%oftotalestimatedenergyexpenditureofaboutUSD4.5trillioninIEAcountries.Theseefficiencysavingshavealsoprovidedawiderangeofothermultiplebenefits.Forexample,CO2emissionsare20%lowerthantheywouldotherwisehavebeen,energysecurityhasbeenstrengthened,demandpressureonenergypricesislower,andhealthandwell-beingoutcomeshavebeenimprovedthroughcleanerairandmorecomfortablehomes.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE77IEA.CCBY4.0.Changeinenergydemandanddrivers,IEAcountries,2000-2020IEA.CCBY4.0.Note:Changeintotalfinalenergyconsumptionistheneteffectofchangesinactivity,efficiencyandstructureacrossbuildings,transportandindustry.Forexample,inresidentialbuildings,activityreferstopopulation,structurereferstopercapitafloorarea,efficiencytoenergyuseperfloorarea.SeeIEAEnergyEfficiencyIndicatorDocumentationforafullexplanation.Source:EnergyEfficiencyIndicators2022.Highfossilfuelpricesaredrivinganenergycost-of-livingcrisis,hurtingvulnerablecommunitiesthemostAsaglobalaverage,householdstypicallyspendaround7%ofincomeonenergy,withgenerallyacceptedthresholdsof“affordability”ataround6%ofhouseholdincomeandenergypovertybecomingaproblemwhentheproportionspentrisestoover10%ofhouseholdincome.Typically,aroundhalfofhouseholdenergyexpendituresareforthehome,primarilyheating,coolingandcooking,andhalffortransport.Increasedenergycostshavebeenthesinglebiggestcontributortotheriseininflationexperiencedinmostcountriesin2022.Thisisposingamajorthreattoglobalgrowth,amplifyingenergypoverty,aswellasrestrictingaccesstomodernenergyservicesinmanyemergingeconomies.Whilethecurrentenergycrisisisglobal,itiscentredinEurope,whichisrecordingsomeofthehighestratesofenergypriceinflation.InMarch2022theEuropeanHealthyHomesBarometerestimatedthataround50millionhouseholdsarelivinginenergypovertyinEurope--afigurenowlikelytobesignificantlyhigherduetotheongoingenergycrisis.Energypovertyisnotonlyafinancialissueforconsumers,butalsoahealthone–withtheimpactofcoldhousinganditswell-understoodassociationwithillnessandexcesswinterdeaths.Forexample,doctorsintheUnitedKingdomare-20%-15%-10%-5%0%5%10%15%20%25%20002002200420062008201020122014201620182020ChangeinenergydemandTotalfinalenergyconsumptionActivityEfficiencyStructureEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE78IEA.CCBY4.0.warningofa“significanthumanitariancrisis”thiswinterashalfofallhouseholds’facefuelpoverty.Thisunderscorestheimportanceofsupporttohelpvulnerableconsumersmanageenergycoststhiswinterandbeyond.Year-onyearchangeinenergypriceinflation,October2022IEA.Allrightsreserved.Source:OECDDatabaseonConsumerPriceIndices,asmodifiedbytheIEA.Energyisalsoanimportantindirectdriverofcostsforfoodandmanyothergoodswiththepriceofoilaccountingforasmuchas64%offoodpricemovements.Thisismajorconcerninemergingmarketanddevelopingeconomieswherefoodcomprisesamuchhighershareofhouseholdincomeandincreasedenergycostsareexacerbatingthefoodcrisis.Theburdenofrisingpricesisunfairlydistributed,bothwithinandamongcountries,impactingtheleastabletoafforditthemost.Newanalysisinthe2022IEAWorldEnergyOutlookhighlightsthatinadvancedcountriesthepoorest20%ofhouseholdsconsumeonlyathirdoftheenergyoftherichest20%,butspendamuchlargershareoftheirincomeonit.Thispictureisevenstarkerinemerging3581216171718191919202021212727272829293439444850535759606363711001370255075100125MexicoIsraelSpainCzechRepublicCanadaKoreaIcelandUnitedStatesSloveniaSlovakRepublicColombiaGreeceFranceSwitzerlandChileHungaryLuxembourgFinlandPortugalSwedenNorwayPolandEuropeanUnion–…GermanyIrelandAustriaDenmarkLatviaUnitedKingdomEstoniaBelgiumLithuaniaItalyNetherlandsTürkiyePercentagechangeoverthesameperiodpreviousyearEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE79IEA.CCBY4.0.marketanddevelopingeconomieswherethepooresthouseholdsconsumeninetimeslessenergythanthewealthiest.AccesstomodernenergyservicesandmoreefficientcleancookingandheatinghasbeensetbackFrom2019to2022,thenumberofpeoplewithoutreliableaccesstoheating,cooling,cleancookingandotherenergyserviceshasrisentoaround2.5billionworldwide,withanextra160millionhouseholdsspendingatleast10%oftheirincomeonenergy.Around75millionpeoplewhohadrecentlygainedaccesstoelectricityarelikelytohavelosttheabilitytopayforit.Thiswillleadtoasignificantincreaseintheuseoffirewood,charcoalandothertraditionalbiomassforheatingandcooking.ThisisthefirstdeclineinthenumberofpeoplewithoutaccesstoelectricityindecadesandishavingaparticularlysevereeffectinSub-SaharanAfrica,hometo80%oftheworld’spopulationwithoutaccess.ThishasbeentheresultofslowingelectrificationprogrammesduetothecombinedeffectsoftheCovid-19andenergycrises.InSouthAfrica,forexample,transportfuelcostswere56%higherinJulythan12monthspreviously.IEAactivitiesonenergyefficiencyinAfricaArecentIEAreport,theCleanEnergyTransitionsintheGreaterHornofAfrica,foundthatwhileenergydemandinDjibouti,Eritrea,Ethiopia,Kenya,Somalia,SouthSudanandUgandahasgrownby35%peryearoverthelastdecade,aroundhalfofthepopulationstilllacksaccesstoelectricityandonlyoneinsixpeoplecookswithmodernfuels.Thisgroupofcountriesaccountsforone-quarteroftheGDPofSub-SaharanAfricabutuseslessenergythanthatofBelgiumandtheNetherlandscombined,whilehavingtentimesthepopulation.TheIEAsupportsenergyefficiencycapacitybuildinginAfricathroughtheCleanEnergyTransitionProgramme.Inlate2022,anIEARegionalTrainingonEnergyEfficiencyPolicyPackagesforSub-SaharanAfricawasheld,whichdiscussedhowstrengtheningenergyefficiencycancontributetoarangeofeconomic,socialandenvironmentalgoals.Thepolicypackagesareacombinationofregulation,informationandincentivemeasuresformajorendusessuchasappliances,buildings,industryandtransport,whichhaveprovidedsuccessfulresultsinboostingefficiencywhenusedincombination.Theworkshopexploredconcreteinternationalandregionalcasestudiesandcontributedtobuildingacommunityofenergyefficiencyprofessionalsintheregion.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE80IEA.CCBY4.0.From2019-21,thenumberofpeoplelivingbelowthepovertylineinLatinAmericaincreasedfrom28%to30%–ajumpof14millionpeople.Thisnumberisincreasingfurtherduetotheglobalenergyandcost-of-livingcrisis.Sincethe1990s,countriesintheregionhavestrengthenedsocialsupportprogrammesforthepoorestpeople.Thisincludessupportforenergybills:40%ofcountriesintheregionarededicatinganaverageof1%ofGDPtosubsidiseelectricity,primarilytohouseholds.Thesemeasuresarecriticalshort-termstepstoprotectvulnerablepeopleandhouseholdswhilelonger-termsolutionsareputinplace.PoliciesaswellastheexistingstructureofenergyconsumptiondeterminetheimpactofenergypricerisesInadditiontotheunderlyingefficiencyoftransportsystemsandbuildings,energybillsarealsoafunctionoftheamountofenergyconsumedineachhousehold,distancestravelledbycar,thefuelmixandpriceofvariousfuels,aswellasanytaxationandenergybillsupportmeasures.Thesedifferencesmeanthatexposuretohigherpricesvariessignificantlyaroundtheworld,withsomecountriesmoreexposedtohigherelectricitypricesforresidentialuse,gaspricesforheating,oroilpricesfortransport.Averagehouseholdannualenergyexpenditure,selectedcountries,2019and2022IEA.CCBY4.0.Sources:EstimatedbasedonIEAEnergyPricesandEnergyEfficiencyIndicatorsdatabases.-4%18%26%20%26%19%58%17%50%33%33%25%32%32%53%49%93%52%-1000010002000300040005000600070008000HungaryKoreaPolandPortugalSlovakRepublicFranceCzechRepublicSloveniaUnitedKingdomAustriaFinlandIrelandSwitzerlandBelgiumLuxembourgDenmarkNetherlandsUnitedStatesUSD/dwellingHeatingandcoolingOtherresidentialTransportChangeinexpenditure,2019-22Householdexpenditure,2019%change,2019-22EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE81IEA.CCBY4.0.Forexample,duetotheHungariangovernment’sutilitycostreductionprogramme,BudapestisoneofthecheapestplacestobuynaturalgasintheEuropeanUnion,whileinothercountriesthecostofheatingandotherresidentialusehasalmostdoubled.Thedegreetowhichhighermarketpricesfortransportfuels,gasandelectricityarepassedthroughtoconsumersisasignificantdeterminantofend-userprices,withthedifferenceoftenbeingabsorbedthroughincreasedpublicsubsidies.Targetingspendingcanprotectthevulnerable,improvepublicbudgetsandmaintainincentivesforefficiencyWithhouseholdsandbusinessesfacingsignificantlyhigherenergybillsthisyear,governmentsinallregionshavebroughtforwardarangeofinterventionstoprovidesupportforconsumers.ThevalueofthisemergencygovernmentspendingisnowoverUSD550billion.Inemerginganddevelopingeconomiesthisshort-termsupportnowoutweighsthatprovidedforcleanenergyinvestmentssinceMarch2020.Overallsupportissettofurtherincreasesubstantially,suchasthroughtheverylargeUSD200billionpackageinGermany.Interventionshavevariedincoverageandsize,butgenerallyfollowoneoftwoapproaches:•Energypricecontrolssetalimitontheamountaconsumerpays,usuallyperunitofenergy.Theyuseacombinationofpricecapsonwholesalepricerises,limitingsuppliermarginsorremovingcomponentsofbillssuchasnetworkorpolicycosts.Foregonesupplierrevenueiscompensatedbygovernments.ExamplesincludepricecapsintroducedinPortugalandSpain;theUnitedKingdom’sEnergyPriceGuarantee;andFrance’scaponregulatedelectricitypricerisesat4%through2022and15%inthelongerterm.InOctober,theEuropeanCommissionproposedaDynamicPriceCeilingforimportedgas.•Incometransfersthatprovidemoneydirectlytoconsumersregardlessofhowmuchenergytheyuse.Thisisoften,thoughnotalways,means-testedtotargetlesswell-offconsumerswheresocialsecuritysystemsallowforit.Forexample,Germanyhaspaidaone-offenergypriceallowanceofEUR300toincometaxpayers,withextrasforthosewithchildrenoronlowincomes.Identifyingandmakingtransferstovulnerableconsumersisdependentonnationalsocialsecuritysystemshavingadequatecoverage.Forexample,inthetransportsectorthepercentageofenergypriceincreasesbeingpassedthroughtoconsumershasfallenacrossallcountrieswiththedifferencebetweenmarketpricesandend-userpricesgenerallybeingmetbypublicbudgets.Forinstance,arecentIMFnotesuggeststhat26outof31advancedeconomiessurveyedhaveannouncedatleastonemeasuretolimitEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE82IEA.CCBY4.0.thepass-throughofhigherinternationalpricestodomesticconsumersand45outof103EMDEcountrieshavealsomovedtolimitpass-throughthisyear.Proportionofinternationaltransportfuelpriceincreasespassedthroughtodomesticconsumers,byregionIEA.Allrightsreserved.Sources:IMF(2022),FiscalPolicyforMitigatingtheSocialImpactofHighEnergyandFoodPrices,asmodifiedbytheIEA.Governmentsineveryregionabsorbedvaryingproportionsoftheoilpricerisesofearly2022puttingpressureonpublicbudgets.Asofmid-October2022,thethinktankBruegelestimatedthatEuropeangovernmentshaveallocatedaroundEUR670billiontosuchschemessinceSeptember2021.Suchsubsidiescanredirectpublicbudgetsawayfrommoreeffectivepoverty-reductionschemes.ItwasforthisreasonthatinAugust,Indonesiaannouncedareductioninthenationalpetrolsubsidy,whichitwillinsteadusetobettertargetlow-incomehouseholds.Asenergyefficiencylowersenergyconsumption,itcanalsoprovideareductioninpublicbudgetsspentonsuchsubsidies.During2022theOECDandInternationalMonetaryFundhaverecommendedwindingdowngeneralsubsidiesandpricecontrolsandshiftingthebalancetowardsprovidingmoretargetedsupport,especiallytovulnerablehouseholds.Morefocusedpoliciesonhousingqualityisequallyimportantgiventhatpeoplelivingintheleastefficienthomescanfaceenergybillsofmorethananorderofmagnitudehigherthanthoseinthemostefficient.Targetedpolicysupportthatimprovesefficiencyreducesbillswhileprovidingin-kindincomesupportthatpermanentlylocksinsavings.0%20%40%60%80%100%High-incomeEconomiesLatinAmericaandCarribbeanEmergingandDevelopingAsiaEmergingandDevelopingEuropeSub-SaharanAfricaCaucasusandCentralAsia;MENA,AfghanistanandPakistan%ofenergypriceincreasepassedthroughtoconsumersDec20-Dec21,averagepassthroughJan22-Apr22,averagepassthroughEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE83IEA.CCBY4.0.Publicfundingtoshieldconsumersfromtheenergycrisis,September2021-October2022IEA.Allrightsreserved.Source:Bruegel,asof21October2022.NationalPoliciestoshieldconsumersfromrisingenergyprices,asmodifiedbytheIEA.GasandelectricitypricecontrolsundertheGermangovernment’sEUR200billion“doubleka-boom”energysupportpackagehavealsobeentargetedsothatconsumerspayasubsidisedrateforenergydemanduptoathreshold,andafterwhichamarketrateapplies.Linkingthisthresholdtoapreviousyear’senergyconsumptionincentivisescontinueddemandreduction.Governmentsinemerginganddevelopingeconomieshavealsoturnedtoarangeofmeasurestoreduceconsumerpressure.Somehavefocusedonpricecontrols,suchasreducedtaxesandadjustmentstodomesticprices.However,morethanhalfhavenotimplementedanynewmeasures.050100150200250300EURBillion0481216202428NumberofcountriesEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE84IEA.CCBY4.0.ProportionofcountriesintroducingmeasurestoshieldconsumersfrompricerisesinApril2022IEA.Allrightsreserved.Source:IMFFiscalPolicyforMitigatingtheSocialImpactofHighEnergyandFoodPrices,asmodifiedbytheIEA.ResponsestoanIMFsurveyof134countriesconductedinApril2022.Least-efficienthomescanresultinenergybillsseveraltimeshigherthaninthemostefficientThewiderangeofefficiencylevelsinbuildingsmeansthatmanycitizensareheadingintowinterwithvastdifferencesintheirexposuretohighenergyprices.Forexample,intheUnitedKingdom,themajorityofhouseholdsliveindwellingswithanenergyperformanceratingofDorlower.Evenin2019,atypicalconsumerintheveryworst-performingbuildingsfacedestimatedannualhomeenergybillsofUSD3440–morethanthreetimestheUSD935paidbyhouseholdsinbuildingsratedatB.Withrecentenergypricerises,annualUKhouseholdenergybillsfromOctober2022areestimatedtobearounddoublethelevelof2019.Followingthegovernment’sEnergyPriceGuaranteeplan,thesameamountofenergyusageinaG-rateddwellingasin2019wouldincurabillofUSD7220comparedwithUSD1800inaB-ratedbuilding.Thishasledtoincreasedattentiononthevalueofenergyefficiencyinsupportinghouseholdswithrisingenergycosts.0%10%20%30%40%50%60%NomeasuresannouncedIn-kindsubsidiesTraderestrictionsCustomsdutiesBelow-the-lineSubsidiesforindustriesOtherrevenuemeasuresPricefreeze/subsidyReducedconsumptiontaxesIncometransfers(cash)OtherrevenuemeasuresReducedtaxes%ofcountriesHigh-incomeeconomiesEmerginganddevelopingeconomiesEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE85IEA.CCBY4.0.Typicalannualhouseholdenergybills,bybuildingenergyperformancecertificateratingintheUnitedKingdomatsummer2019andOctober2022pricesIEA.CCBY4.0.Note:2019billestimatedas12monthsofenergyuseatGBdefaulttariffcaplevelApril-September2019.Billincreaseestimatedasdifferenceincostbetweenthisand12monthsofOctober2022EnergyPriceGuaranteelevel.Sources:IEAanalysisofdatafromUKDepartmentforBusiness,EnergyandIndustrialStrategy2019FuelPovertyStatistics;OfficeofGasandElectricityMarkets,Defaulttariffcaplevel:1April2019to30September2019,EnergyPriceGuarantee,DecisionforTypicalDomesticConsumptionValues2020.Asimilarpictureemergesfromothercountries.InDenmark,forexample,ittakesmorethantentimestheenergy,toheattheleast-efficient,typical-sizehomesthanitdoesthebest-performinghomesofthesamesize.Householdsalreadylivinginmoreefficientbuildingsfacelowerbillswhileenjoyingahealthier,morecomfortablehome.Byinstallingfurtherupgrades,theyarealsoabletoshieldthemselvesagainstcontinuedhighpricesinto2023andbeyond.InstallingsolidwallandloftinsulationintheUnitedKingdomcouldreduceatypicalhouseholdbillbyover10%,forexample–representinganestimatedUSD400savinginanE-ratedbuilding.Simple,low-costtechnologies,suchassmartspaceheatingthermostats,canalsofacilitateenergydemandreductionandcostaslittleasUSD80topurchaseandinstall.Propermaintenanceofheatingsystemsthrough“hydronicbalancing”–oroptimisingthewaterpressureinaheatingsystem-canprovideinexpensiveenergysavingsofupto15%,particularlyinlargerbuildings.InJuly,theGermangovernmentmadeitcompulsoryforallownersoflargebuildingswithacentralheatingsupplytocarryouthydronicbalancingwithinthenexttwoyears.IntheUnitedStates,higherenergycostsareexpectedtoaddbetween19%and28%tothenaturalgasbilloftheaveragehomefromOctober2022toMarch2023,dependingonwintertemperatures.TheUSEnvironmentalProtectionAgencyhasestimatedthathomeownerscansaveanaverageof15%onheatingandcoolingcoststhroughinsulation-basedretrofits.TheAmericanCouncilforanEnergy010002000300040005000600070008000GFEDCBAverageannualenergybill(USD)EfficiencyratingAnnualbillatsummer2019priceIncreaseinbill2019-22EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE86IEA.CCBY4.0.EfficientEconomy(ACEEE)haswarnedthatpriceincreaseswillhurtlow-incomeandBlack,HispanicandNativeAmericanhouseholdsthemost,whopayamuchlargershareoftheirincomeonenergybills.Othergroupsthatspendagreaterproportionoftheirincomeonenergyincludetheelderlyandrenterhouseholds.Smartthermostatsprovidealow-costmeansofreducingenergybillsOneoftherecommendationsoftheIEA’s10-PointPlantoReducetheEuropeanUnion’sRelianceonRussianNaturalGasistoencourageatemporarythermostatadjustmentbyconsumersofonedegree,whichcouldleadtoanestimated10bcmsavingofnaturalgaseachyear.Connectedthermostats,smartheatingcontrols(suchasthermostaticradiatorvalves,TRVs)orwell-designedautomationcanfacilitatetemporarytemperatureadjustmentsbyconsumers,helpingtosaveenergy,particularlyatpeakhours.TheFrenchnationalagencyresponsibleforenergyefficiency,ADEME,hasfoundthatprogrammablethermostatscanreduceheatingenergydemandbyupto15%,dependingonthetypeofbuilding.TheUSDepartmentofEnergyfoundthatloweringthetemperatureby4-5.5°Cforeighthoursperday(e.g.overnightorduringhoursawayfromhomewhileattheoffice)reducesenergyconsumptionforheatingandcoolingbyupto10%.Anautomatedthermostatmakesthiseasiertoachievethanmanuallyswitchingheatersonandoff.Forthisreason,somecountrieshaveintroducedincentivesforsmartthermostats,suchasFrance’sCoupdePouce(2020),Belgium’sEcoVouchers,ortheSEEHschemeintheNetherlands(2019).Todate,over130millionunitsofconnectedandsmartthermostats,andhomeenergymanagementsystemsasawhole,havebeeninstalledworldwide.Deploymentisincreasingrapidly.Totalinstallationsareexpectedtoreachbetween510millionand640millionby2030.Industryestimatessuggestthataround70millionhomesintheEUhaveTRVsfittedandupto130TWhofenergycouldbesavedannuallybyupgradingthosethatdonotyethavethem.Buyingnewer,smallerandelectricvehiclescanlowertransportfuelbillssubstantiallyChoicesaroundthesizeandefficiencyofcarsthatconsumersbuyhasasignificantimpactonfuelbills.Lookingatpetrolcars,Europeanbuyerschoosingthebest-sellingcompactormedium-sizedmodelsfacebillsthatare20%-25%higherthaniftheyhadchosenthemostefficientmodelofthesamesize.ThisEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE87IEA.CCBY4.0.representsanestimatedannualsavingofUSD210-230atJune2022petrolprices,aroundUSD60higherthantheywouldhavebeenayearago.Evengreatersavingsareavailabletodriverswhochoosesmallercars.Europeanbuyersoptingforthemostefficientmedium-sizedcaroverabest-sellingcrossoverSUVhavefuelbillsthatare30%lowerwhilebroadlyretainingthesamelevelofutility.AtJune2022pricesthisreplacementleadstoanannualfuelbillsavingofalmostUSD500peryear.ThankstonewEuropeanfueleconomystandardsthatcameintoforceinrecentyears,fuelcostsavingsarelargestforconsumersthatreplaceanoldvehiclewithanewone.In2022,thedifferenceinefficiencybetweena10-year-oldversionoftoday’sbest-sellingmodel,andtoday’smostefficientmodelofthesamesize,translatesintoasavingofUSD850foramedium-sizedcarorUSD780foracompactcar.AnnualsavingsofmorethanUSD1000areavailabletodriversreplacinga10-year-oldSUVwithasimilarnewandmoreefficientcar.Fuelbillsfordifferentvehicletypes,inEurope,June2021andJune2022IEA.CCBY4.0.Electricvehicledrivershaveaccesstothegreatestpotentialfuelbillsavings.Forexample,atypicalEuropeanelectriccardriverhasanestimatedannualbillofjustUSD420whenchargingathome,despitehouseholdelectricitypricerisesoverthepastyear.Thisbill–significantlylowerthanthoseofanypetrolvehicletypeanalysed–istheresultofthemuchhigherefficiencyofanelectricpowertrainrelativetoaninternalcombustionengine.SimilarresultshavealsobeenshownbytheDepartmentofEnergyintheUnitedStates,whereinAugust2022electricvehicleswerefoundtohavebyfarthelowest05001000150020002500300010year-oldbest-sellingBest-selling202110year-oldbestsellingBest-selling2021Mostefficient10year-oldbest-sellingBest-selling2021MostefficientCompactEVCrossoverSUV(petrol)Medium-sizedcar(petrol)Compactcar(petrol)Indicative12-monthfuelbill(USD)BillincreaseusingJune2022fuelpriceBillusingJune2021fuelpriceUSD231USD211USD1018USD781USD853EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE88IEA.CCBY4.0.annualfuelcostofalllight-dutyvehicles,ofaroundUSD1000orlessperyearcomparedwithgasolinecars,whichgenerallycostatleasttriplethisamounttodrive.Thisestimateforlowerbillsfromusingelectricvehiclesalsomustbequalifiedbythecostofchargingusingpublicchargingpointthatvariesconsiderablyandcanbefrom30%highertothreetimesmoreexpensivethanchargingonahomecharger.Preventingpricegougingfrompublicchargingoperatorsandsupportingaccesstofairpricesisakeyissueasthecharginginfrastructureexpands.AnalysisbytheIPCCinApril2022suggeststhatbatteryelectricvehiclescouldusearoundthreetofourtimeslessenergyperkilometrethananinternalcombustionenergyvehiclewiththesamemass.Whiletank-to-wheelefficienciesareveryhighforelectricvehicles,duetotheremovalofthermallossesfromcombustionintheengine,therearecombustionandotherlosesinpowergeneration,transmissionanddistribution.Low-GHGemissionselectricityisneededforfullclimatechangebenefits.ToobtainamorecompletepictureofefficiencyandCO2emissions,awell-to-wheelanalysisofelectricvehiclesisimportant,especiallywherepowerisstillpredominantlygeneratedbycoal.3.2GreaterconsumerawarenessandbehaviourchangetosaveenergyGovernmentsturntobehaviourchangecampaignsasasourceofrapidenergydemandreductionSincethebeginningoftheyear,atleasttenEuropeangovernmentshavelaunchedbehaviourchangeandawarenesscampaignstogiveconsumersinformationonhowtheycanlowertheirenergyuse.Awarenesscampaignstendtoencouragecitizenstoturndowntheirthermostats,shortentheirshowers,line-dryclothesandminimiseenergyusefromdriving.InApril,theIEAandEuropeanCommissionlaunchedthePlayingmyPartcampaign,outliningsimpleactionsthatcitizenscantaketoreducetheirbillsandaggregateenergydemand.InMay,theEUSaveEnergyCommunicationoutlinedtheEuropeanCommission’stwo-prongedapproachofpromotingmid-tolong-termefficiencyimprovementswhileachievingimmediateenergysavingsthroughbehaviouralchanges.Thisisreflectedinmanynationalstrategies,includingDenmark’sSammensparervipåenergien(Togetherwesaveenergy)campaignandGermany’s80MillionengemeinsamfürEnergiewechsel(80milliontogetherforenergysaving),whichalsoprovideuserswithinformationtohelpcitizenscarryouthomeenergyretrofits.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE89IEA.CCBY4.0.CampaignshavealsobeenusedtogreateffectoutsideofEuropetotacklepastandcurrentenergycrises.InresponsetoahydroelectricitysupplycrisisinBrazilduring2021,thegovernmentimplementedanawarenesscampaignalongsidefinancialincentivestoreduceenergyuseatpeakhours.InKorea,followinglarge-scaleblackoutsin2011,awarenesscampaignsusesocialmediaandpopularculturechannels,aswellasconventionalmediaandinpublicadvertisements.Toaddressthecurrentcrisis,thenewly-electedKoreangovernmentplanstousethesecampaignsalongsidean‘EnergyCashback’incentiveschemetoencouragemembersofthepublictoreducetheirenergyuseby10%thiswinter.Inrecentyears,theIndiangovernmenthasencouragedairconditioneruserstorunappliancesat24°Cormorebymakingitthedefaultappliancetemperatureuponpurchaseandviaanawarenesscampaign.PlayingmyPartcampaign:NinesimpleactionscitizenscantaketoreduceenergyIEA.CCBY4.0.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE90IEA.CCBY4.0.CharacteristicsofsuccessfulbehaviourandenergyawarenesscampaignsTheIEAhasanalysedawiderangeofenergyawarenessandbehaviourcampaignsacrosscountriesin2022,andoutlinedthekeyfeaturesofsuccessfulcampaigns.Gettingthemessageright:Campaignsaremorelikelytosucceedifthemessagesaretargeted,relatableandactionable,andhittherighttonewiththeiraudience.Dependingonthecontext,governmentsmayhighlightcost,environmentalorsocialbenefits.Denmark'scampaignfocusesonthestrengthofsolidarity,withamessagefocusedonsavingenergytogether.Gettingthemessageacross:Thechoiceofmessengerandchannelstoconveymessagescanhaveastrongimpactonacampaign’sreceptionbycitizens.TheNetherlandsleveragedthesupportofbusinesses,prominentNGOsandfoundationsinitsZetookdeknopom(Fliptheswitch)campaign.Usingvisuals,catchynamesanddedicatedwebsitecanincreaseshareability.Campaignsareoftensharedacrossarangeofprint,onlineandbroadcastmedia,andtrackingdigitalimpactcanfurtherimprovereach.Notably,Koreademonstratedaneffectiveuseofsocialmedia,usingmessagingplatformKakao,inadditiontomoreconventionalmedia.Combininginformationwithbehaviouralinsights:Whilegoodinformationisessential,itisnotenoughtoachieveasustainedresult.Pairingacampaignwithreal-timefeedback,relevantnudges,demandresponseprogrammes,homeenergyreports,andmorecanfurtherstimulateenergy-savingbehaviour.Usinginsightsfrombehaviouralspecialistscangreatlyenhancethesuccessofbehaviouralchangecampaigns.Campaignsinacrisiscontext:Citizens’awarenessofenergyissuesandtheirwillingnesstoactisusuallyhigherintimesofcrisis,whichmayjustifystrongermessages.Manycountriesalreadyhavetheexperienceofdevelopingandlaunchingcitizen-orientedcampaignsinresponsetootherenergysupplycrises.InadditiontotheexampleofJapan’sresponsetothe2022earthquake,Brazillaunchedconsumercampaignsinresponsetoitshydrocrisesinrecentyears,whileSouthAfricahadexperiencewiththeDayZerocampaign,anticipatingwatershortages.InCalifornia,anemergencycellphonealerttoreduceenergydemandinSeptemberiscreditedwitha2.6GWdropindemandwithin45minutes.ThepotentialtoworkmoreathometosavefuelisalsobeingdiscussedinGermany,Ireland,SouthAfricaandthePhilippines.However,energysavingsfromavoidedtravelarepartiallyoffsetbyincreasedhouseholdenergyconsumptionfromheatingandotherbehaviouralshifts.HouseholdbillpayersbearEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE91IEA.CCBY4.0.theburdenofincreasedenergybillsfromoperatingremotelyfromhomeoffices,estimatedatbetweenUSD20to100permonth.Governmentsarealsosupportingpublictransportuse,withGermanyhavingprovidedunlimitedpublictransportforamonthatEUR9overthesummerandextendinganadaptedversionmovingforward.Inthefirstthreemonthsofthescheme,over52millionpeopleboughttheseticketsandthereductionincarusecutcarbondioxideemissionsby1.8Mt,around6%oftransportemissionsoverthesametimeperiod.Italyissubsidisingthepurchaseofmonthlyorannualpublictransportticketsforthoseonlowincomes,theUSstateofCaliforniaprovidedpublictransportfreeforthreemonths,andEnglandwillcapthepriceofabusticketforthreemonthsin2023.ActionhasalsobeentakentoreducepublictransportfaresinAustria,IrelandandSpain.Luxembourghasimplementedoneoftheworld’smostgenerouspublictransportprogrammes,makingbusses,trams,funicularssecondclasstrainticketsfreeofchargeinLuxembourgCityandthroughouttheentirecountry.Thisincludespetsandluggagebroughtonboardbypassengers.Advicehasalsobeenproducedonhowprivatecarsandfleetvehiclescanbedrivenmoreefficientlyinordertoreducefueluse,whilecountriesarealsopromotingelectromobility,walkingandcycling.Thereareopportunitiesaffordedbyintroducingthesemeasuresinthelongerterm.Asapartresponsetothe1973oilcrisis,theNetherlandsandDenmarkintroducedmeasuresthathelpedprioritisecyclingasamodeoftransportandcontinuedtobuildonthisafterthecrisishadpassed.TheCopenhagenizeIndexprovidesaholisticglobalrankingofhowbicycle-friendlyacityiswithlinkstosomeofthemostrecentsuccessstories.InJapan,TokyoElectricPowerCompanylaunchedPowerSavingChallenge2022wherepowersavingpointscanbeearnedandexchangedforgoodsusingonlineservicessuchasAmazon.Anewfive-levelscalerankingsystemhasbeenintroducedthatevaluatesandpublishestheannualstatusofenergy-savingcommunicationeffortsbyenergyretailers.Thesystemexaminesthelevelofenergy-saving-relatedinformationandservicesthatenergyretailerssuchaspowerandgascompaniesprovidetotheircustomers.Retailersaregivenadditionalpointsforevaluationiftheyprovideextrainformationforconsumerssuchasvisualisinghourlyenergyconsumption,signallingforengagingindemandresponse,andpredictingfutureenergychargesandusage.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE92IEA.CCBY4.0.3.3EnergysecurityandRussiangasRapiddeploymentofefficiencymeasuresinindustryandbuildingscanreducetheneedforRussiangasinEuropeEurope’srelianceonRussiansuppliesofnaturalgaswasthrownintosharpfocusin2022.TheIEA’smostrecentGasMarketReportshowsthatRussiangasincreaseditsshareinEuropeansupplyfrom30%in2009to47%in2019.AsaconsequenceofEuropeansanctionsandRussiansupplycuts,thisfigureisexpectedtodropto9%in2022.Whiletheshortfallhaslargelybeenmadeupforwithalternativesupplies,thishasalsobeenaccompaniedbya10%year-on-yearreductioningasdemandinthefirsthalfof2022.TheEuropeanCommission’smainpolicyresponsetotheRussiangascrisisistheREPowerEUPlan,whichaimstoreduceitsusebytwo-thirdsbytheendof2022andby100%by2030.Energysavingisoneoftheplan’sthreecentralpillars.ItincreasesitsprevioustargetundertheEnergyEfficiencyDirectiveforEU-wideenergysavingsby2030,to13%fromtheprevious9%.Italsoaimstodoublethedeploymentrateofheatpumpstoachieve10millioncumulativeinstallationsover2023-27,andaccelerateelectrification,especiallyinindustry.Accordingtotheplan,suchmeasurescouldreducegasuseintheresidentialsectorby37bcmperyearandinindustryby12bcmperyearby2030.Behaviouralchangemeasures,laidoutintheEUSaveEnergyCommunicationandPlayingmyPartcampaign,includeencouragingreductionofthermostatsby1°Candcouldsavearound10bcmofgasperyear.Combined,theplan’senergy-savingmeasurescouldsavetheequivalentof42%ofthe140bcmofnaturalgasimportedbyEuropefromRussiain2021.Mainendusesofnaturalgasinmajorconsuming,inEuropeancountries,2019IEA.CCBY4.0.Note:Thisdoesnotincludegasusedinpowergeneration.Source:EnergyEfficiencyIndicators2022.0102030GermanyFranceItalySpainUKNetherlandsBelgiumManufacturing0102030SpainBelgiumNetherlandsFranceItalyUKGermanyGasdemand(bcm)Heating0102030BelgiumNetherlandsFranceSpainItalyGermanyUKWaterandcookingWaterCookingEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE93IEA.CCBY4.0.Energy-savingmeasuresimplementedinEuropeoverthesummerappeartohaveaffecteddemand.SeveralstudiessuggestthatinOctober,weather-adjustedgasdemandinGermanywasaround20%lowerthanthesameperiodin2021.However,gasdemandishighlyweather-dependent.Colder-than-expectedconditionsoverwinter2022-23couldcounteractmuchoftheachievedsavings.AsEuropelooksaheadto2023,thefocusonimmediateenergysavingswillbecomesecondarytothemoreurgentquestionofthestructuralenergyefficiencyimprovementsgovernmentscanmakeinthenext10-12months,whichwillbecriticalforEuropeanenergysecuritynextwinter.Rapidelectrificationofindustrialheatispossible,especiallyintextiles,andfoodanddrinkmanufacturingGlobally,heatrepresentstwo-thirdsofallenergydemandintheindustrialsector,andone-fifthofenergydemandacrosstheglobe.Electrifyingindustrialprocessesoffersthesimultaneousbenefitsofdirectlyreducingfossilfueldemand,increasingprocessefficiencyandpotentiallysupplyingtheremainingenergydemandwithincreasinglylow-carbonelectricity.Additionally,electrificationcanofferindustrythepotentialfornewbusinessmodelsbecauseofincreasedflexibilityinlocationandsizingofplantswhencomparedwithfuelcombustion-basedprocesses.Inlightindustry,electrificationnormallyentailsaswitchfromfossilfuelstoelectricityasasourceofprocessheat.Thiscanbeachievedusingaheatpump,amicrowaveorinductionprocess,ormechanicalmethodsofseparationfordewateringlikereverseosmosis.Bycontrast,electrificationinheavyindustrygenerallyinvolvesreplacingthemainprocesstechnology.Insteelmaking,forexample,thisinvolvesreplacingablastfurnacewithanelectricarcfurnace(EAF)orinductioncorelessfurnace.Thistechnologyholdssignificantpotentialforenergysavinganddecarbonisation.Usingsecondary,orrecycled,steelproducedfromscrapwithanEAFcansaveapproximately70%ofenergycomparedtotheconventionalblastfurnace(BF-BOF)routeforprimaryvirginsteel.Thereisgreatpotentialfortherapidelectrificationofindustry,withseveraloptionsavailableintheshortterm.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE94IEA.CCBY4.0.PotentialenergysavingsfromelectrificationofindustryintheUnitedStatesIEA.CCBY4.0.Note:Bf-BOF=Conventionalblastfurnacerouteinsteelproduction.DRI=Directreducediron.EAF=ElectricarcfurnaceOneindustrywithrelativelyhighpotentialtobenefitfromrapidelectrificationisbeerbrewing,wherethermalenergyconstitutesaround70%oftypicalenergyconsumed.Beerbrewingusessteamgeneratorstocooklargevatsofwaterwithmaltedgrainandotheringredientstoaround70°Cto90°Cbeforecoolingforfermentation.Forexample,globalbeermanufacturerCarlsberghasprioritisedenergyefficiency,andeightofitsbreweriesarenowsuppliedwhollybyrenewableelectricityandheat.Relatedly,Ahascraghwhiskeydistillerybecamethefirstzero-emissiondistilleryinIrelandthroughtheuseofheatpumpsandrenewableelectricity.0%10%20%30%40%50%60%70%80%VirginpulpandpaperproductionAmmoniaproductionGlassproductionWetcornmillingSwitchBF-BOFtoH2DRI-EAFRecycledpaperSugarbeetSwitchBF-BOFtoelectrolysisInductioncorelessfurnaceSoybeanoilSingleshotinductionfurnaceMilkpowderBeerproductionPotentialreductioninenergyuseduetoelectrificationAluminiumcastingAmmoniaproductionCrudesteelFoodanddrinkGlassproductionPaperindustryEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE95IEA.CCBY4.0.PotentialforrapidelectrificationofindustryinEuropeIEA.Allrightsreserved.Note:Thedifferenceto100%iselectrificationpotentialthatrequiresmorecomplexsystemicprocesschanges.Source:SchneiderElectricSustainabilityResearchInstitute(2022),asmodifiedbytheIEA.Achievingenergysavingsisheavilyreliantonthesuccessfulintegrationoftheelectrifiedelementintotheprocess,digitalfeedbackonperformance,andongoingcontroloftheoperationalparameters.Whilemuchofthetechnologyisprovenandavailable,deliveringandoperatingnewelectrifiedsystemsinindustrialplantswillrequiresignificantpolicy,managementandtechnicalactions.Thisrelatestothedesign,optimisation,build,operation,maintenance,monitoring,targetingandcontroloftheplantsandtheirprocesses,andtheresourcesrequiredtodeliverthem.Dependencyonnaturalgasforresidentialheatingrangesfrom90%toclosetozeroAsdetailedintheIEA’sTrackingCleanEnergyProgress,naturalgasisthemostcommonfuelusedtoheathouseholdsglobally,accountingfor42%ofresidentialheatingenergydemandandatotalof760bcmin2021.0%20%40%60%80%100%TextilesFoodandbeveragePaperOthersNonferrousmetalsSteelChemicalsAllindustrialsectorsElectrificationpenetration(%offinalenergydemand)AlreadyelectrifiedRapidelectrificationpotentialEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE96IEA.CCBY4.0.Residentialheatingenergyconsumptionbyfuelsource,inselectedcountries,2020IEA.CCBY4.0.Note:Heatreferstoheatproducedfordirectsale,mainlythroughdistrictheatingnetworksandthermalheatfromindustrialprocessesandothersources.“Other”includesmainlyconventionalbiomass.Source:EnergyEfficiencyIndicators2022.InArgentina,Italy,Korea,theNetherlands,Türkiye,theUnitedKingdom,andtheUnitedStates,naturalgasprovidesover60%ofheatingenergy.Finland,NorwayandSwedenusepracticallynonaturalgasforheating,despiteNorwaybeingthelargestgasproducerinWesternEurope.Norwayleadstheworldonresidentialheatelectrificationwithalmostan80%shareofheatingprovidedbyelectricity.OthernotablecountriesincludeCanada,Finland,Japan,NewZealand,andSweden,allwitharoughly30%shareofelectricityforresidentialheating.Districtheataccountsfor10%ofheatingofbuildingsglobally,withthefuelsusedforitrangingfromfossilfuels,wasteheatfrompowergenerationandindustrialprocesses,wastewater,datacentresandrenewableenergy.InEurope,thereareover6000districtheatingnetworksmeetingaround11%ofheatingdemand.Stockholmisonecitywhere98%ofheatingisprovidedbyrenewableorrecycledwasteheatusinglarge-scaleheatpumps–anapproachthatsomecitiesin0%10%20%30%40%50%60%70%80%90%100%NorwaySwedenFinlandChileEstoniaNewZealandJapanPolandGreeceDenmarkIrelandSpainCzechRepublicAustriaBelarusFranceBelgiumGermanyCanadaUkraineAustraliaHungaryKoreaItalyUnitedStatesUnitedKingdomNetherlandsArgentinaPercentofspaceheatingGasOilCoalHeatBiofuelsandwasteElectricityOtherEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE97IEA.CCBY4.0.Germanyarelookingtoemulateaspartofamoveawayfromnaturalgas.Withacapacityof126MWforheatingand80MWforcooling,theKatriValadistrictheatingandcoolingplantinHelsinkiisthelargestheatpumpsystemforheatingandcoolingintheworld.Newdistrictheatingnetworksusingheatpumpscanusereversibletechnologiesthatcanprovidecoolwatercirculation.IntheNetZeroScenario,theshareoffossilfuelsintheglobalheatingmixdropsfrom64%todayto45%in2030.Thiscanbeachievedbyacombinationofimprovedbuildingefficiencyandashifttoelectric,renewableandotherlow-emissionheatingtechnologies.Inthescenario,theshareofelectricityintheheatingmixrisesfrom15%globallyin2021to20%in2030.Countriesaccountingfor80%ofresidentialgasinEuropehaveplanstobannewgasheatingconnectionsAgrowingnumberofcountries,sub-nationalgovernmentsandcitieshaveannouncedbansandphase-outsofgas-burningappliances.TheEuropeanUnionhasanoverallambitiontophasedowngasuseinbuildings,withsomecountriesspecificallystatingtheywillimplementbans.ThisincludesAustria,startingin2023,andtheNetherlands,whichwillpermitonlyheatpumpinstallationsorheatnetworkconnectionsinbuildingsasof2026.Irelandannouncedabanofoilboilersfornewbuildingsstartingthisyearandgasboilersby2025.TheUnitedKingdomhassetatargetthatbansnewhomesfrominstallinggasheatingsystemsandboilersasof2025andforallbuildingsasof2035.Germanyalsostartedthelegislativeprocesstoputinplaceanimplicitbanonfossilfuelheatingstartingin2024,afterwhicheverynewly-installedheatingsystemwouldhavetobepoweredbyatleast65%renewableenergies.FrancehasintroducedanimplicitbaninnewbuildingsbeginningthisyearbymandatingamaximumCO2intensityfornewheatingsystemsthatfossilfuelscannotmeetinalmostanybuilding.IntheUnitedStates,morethan60citiesinCaliforniahaveannouncedbansorarediscouraginggasuseinnewbuildings.InSeptember2022theCaliforniaAirResourcesBoard,directedstateagenciestodraftarulewhichwouldresultinabanonthesaleofallnewnaturalgas-firedspaceheatersandwater-heatingappliancesby2030.By2023,somecities,includingEugene,Oregon,haveabanonnaturalgasinanynewconstruction.SimilarmeasuresareplannedinWashington,DC(2026);Ithaca,NewYork(2030);andNewYorkCity(2040).WhilecomparablebillshavebeenintroducedinatleasteightUSstatelegislatures,othershaveintroducedlawsprohibitingmunicipalitiesfrombanningnaturalgas.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE98IEA.CCBY4.0.ThecityofVancouverandtheprovinceofQuebecinCanadahavealsosetrequirementsfornewbuildingconstructiontobezeroemissionsandarebanningreplacementofspaceheatingandhotwatersystemspoweredbyfossilfuels.Efficiencyregulationshavereducedgasconsumptionby21%inEuropeforspaceandwaterheatinginbuildingsInEurope,buildingsareresponsibleforalmost40%ofenergydemand.Overthepasttenyearsthesector’senergyconsumptionhasfallenby14%,drivenbyimprovingenergyefficiency.YeteveninEUcountrieswithsimilarclimatesthereisawiderangeofenergyperformancelevelsinbuildings.Thismeansthatininsomecountrieswithsimilarclimatesittakestwiceasmuchenergytoheatthesamespace.Forexample,theenergyintensityofresidentialspaceheatingrangesfromaround0.3GJperm2incountriessuchastheNetherlands,SwitzerlandandIrelandupto0.5-0.6GJperm2inBelgium,CzechRepublic,AustriaandPoland.Residentialenergyintensityandheatingdegreedays,inEurope,2019IEA.CCBY4.0.Source:EnergyEfficiencyIndicators2022.Europeanhealthdatahavealsoshownthatcountriesinmilderclimates,wherebuildingsarelesswellinsulatedandheated,havehigherlevelsofexcessmortalityinwinterduetoindoorcold:excesswinterdeathsarehigherinPortugalthantheyareinFinland.AustraliaBelgiumHungaryCanadaItalyCzechRepublicUnitedKingdomPolandLuxembourgGreeceSloveniaFranceAustriaJapanKoreaGermanyDenmarkIrelandLithuaniaNetherlandsSwitzerlandSpainFinlandSwedenUnitedStatesPortugal0.00.10.20.30.40.50.60.70100020003000400050006000ResidentialSpaceHeatingEnergyIntensity(GJ/m²)HeatingDegreeDays(HDD)WARMERWEATHERCOLDERWEATHEREnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE99IEA.CCBY4.0.IntheIEA’s10-PointPlantoReducetheEuropeanUnion’sRelianceonRussianNaturalGas,arapidscaleupofretrofiteffortsfocusingonleast-efficienthomesandnon-residentialbuildingscansavemorethan1bcm,or10TWh,ofgasintimeforthe2023Europeanwinter.Withspaceandwaterheatingalone,Ecodesignregulationshavesavedaround730TWhfrom1990to2020comparedwithbaselineenergyconsumptionof3400TWhin2020.Thisisarounda21%reductionfromwhatwouldhavebeenusedwithoutsuchregulation.Around640TWhofenergysavingscamefromdirectuseoffossilfuelssuchasnaturalgas,coalandoilforheatingbuildings–equivalenttothetotalenergyconsumptionforspaceandwaterheatingofGermanyandPolandcombined.ThereissignificantscopetoimproveinsulationoftheEuropeanbuildingstock,withsomeestimatessuggestingthatupgradingFandGclassbuildingstoBorCclassthroughacombinationofthermalinsulationandheatpumpscouldsaveabout71bcm,whileupgradingtoEclasslevelscouldsave22bcm.Betterinsulatedhomescanuseone-thirdtheenergyofpoorlyinsulatedbuildings,especiallyincoldclimatesIncreasingbuildingperformancecanbeachievedbyadoptingmeasureslikereplacingwindows,airsealingortheapplicationofinsideinsulationmaterial.ThecostforanaveragehometogofromclassFtoclassEisaboutUSD1500andslightlymoretogofurtheruptoclassD.WithcurrentenergypricesinEurope,thisinvestmentcanpaybackafterjustoveroneyear.Requiredheatcapacity(kW)byexternaltemperaturefordifferentlevelsofinsulationIEA.CCBY4.0.Notes:Meanheatlosslevels(W/K)forefficiencygroupquintilesare:Highinsulation(188W/K),MediumInsulation(335W/K),andLowInsulation(563W/K).Source:BasedonSummerfieldetal(2017).02468101220151050-5Outputheatingcapacityrequired(kW)Externaltemperature(°C)HighinsulationMediuminsulationLowinsulationEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE100IEA.CCBY4.0.AnalysisfromalargeenergyperformancemonitoringstudyintheUnitedKingdomshowsjusthoweffectiveinsulationisinreducingheatingcapacitydemands(kW)atdifferentoutdoortemperaturesamonghouseswithdifferinglevelsofmeanheatloss(W/K).Heatingrequirementsfordwellingswithmoreinsulationwerearoundone-thirdoftheleastefficientdwellings.Thebenefitfrominsulationbecomesstrongerwhentheoutsidetemperatureiscolder.HigherEuropeangaspricesmeanheatpumpsarebyfarthebetterchoiceforhouseholdstolowerenergybillsInmostcountriesacrossEuropethepriceofgasrelativetoelectricityhasrisensignificantly.Whileeachcountryhasitsownparticularmixofrelativeprices,thescaleandmagnitudeofhighergaspriceshasdramaticallychangedtheeconomicsofheating.InDenmark,inaBorCenergyperformance-ratedhomethecostofoperatingamuchmoreefficientheatpumpwasonlymarginallylessthanthatofagassystem.However,thissituationhaschangeddramatically.Followingrecentpricerises,thecostofoperatingagasheatingsystemhasrisenforanaveragehouseholdbyaround330%.Incontrast,thecosttoheatthesamespacewithanelectricheatpumphasrisenbyaround100%.Forcomparison,inGermanygasheatingwouldhavebeenmoreeconomicalat2019prices,butcurrentpriceshavereversedthedynamics.Annualheatingcostfor100m²,forgasversusheatpump,bybuildingperformance,inDenmarkandGermany,at2019andSeptember2022pricesIEA.CCBY4.0.Notes:Forcomparability,thethresholdvaluesofbuildingperformanceclassesinenergyconsumptionperm²asusedinDenmarkhasbeenappliedalsototheanalysisofGermany.However,eachcountrydefinestheirownnationalthresholdvaluesaccordingtoregionalclimate.ClassArelatestotheDanishA2015,ClassA+totheDanishA2020.Sources:IEAbasedonStatisticsDenmark,EnvironmentandEnergyStatistics,Energistyrelsen.04000800012000HeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasA+ABCDEFUSDAnnualheatingcostat2019pricesCostincreaseat2022pricesDenmark04000800012000HeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasHeatpumpGasA+ABCDEFUSDGermanyEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE101IEA.CCBY4.0.ScalingupheatpumpdeploymentwillrequireasystemsapproachtomanagehigherwinterpeakelectricityloadsHeatpumpshavereplacedaround20%oftheboilersinEuropesavingconsumersaroundUSD100billionperyearaccordingtotheEuropeanHeatPumpAssociation(EHPA).SalesofheatpumpsinEuropegrewbyover30%duringthepasttwoyears,withalmost3millionunitssoldthisyear.Annualsalesareexpectedtoreachabout5.5millionunitsby2026.TheseandotherglobaldevelopmentsarecoveredinanewIEAWorldEnergyOutlookSpecialReport–TheFutureofHeatPumps,releasedinDecember2022.TheRePowerEUplanhassetatargettodoublethediffusionofheatpumps,includinganextra10millionunitstobeaddedinthenextfiveyearsand30millionby2030thatusewaterasoutputmedium.Suchwater-basedunitsareresponsibleforabouthalfoftheEuropeanheatpumpsales.Oneresultofincreaseduseofheatpumpswillbehigherpeakwinterelectricloads.Astemperaturesdropinthewinter,heatpumpswilldrawmoreelectricalpowerforlongerperiodstoextractheatfromcoldoutdoorair.TheimplicationisagreaterdemandontheelectricitygridduringthesecoldperiodsArecentstudyshowsthattheshiftfromagasboilertoanelectricheatpumpinatraditionalmulti-familyapartmentbuildinginEuropecoulddoubleelectricitydemandintheearlyevening,whenpeoplereturnhomefromwork.Thiswillmeansmartheatpumpcontrolsanddemandsidemanagementwillbecomeincreasinglymoreimportantasheatpumpdiffusiongrows.HeatpumpsalesinEurope2010-2021andprojectionto2026IEA.CCBY4.0.Note:Europesalesinclude21countriesfromtheEUplusNorwayandtheUnitedKingdom.Source:IEAbasedondatafromtheEuropeanHeatPumpAssociation.01234562010201120122013201420152016201720182019202020212022E2026EAnnualheatpumpsales(Millionunits)EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE102IEA.CCBY4.0.Inorderforelectricalgridstocopewithasurgeinloadatpeaktimes,demand-sidemanagement(DSM)technologiesarenecessarytobenefitfromtheheatpumpsandtheflexibilitypotentialofbuildings.IntheIEAAnnouncedPledgesScenario(APS),heatpumpswillprovidearound12%ofdemand-sideflexibilityinEuropein2030.However,tobeabletoshiftheatpumpoperationoutofpeakhourswithoutreducingcomfort,heatneedstobeeitherstoredorproducedondemandbyothermeans.Thethermalinertiaofbuildingscanbealargesourceofstorageifbuildingsaresufficientlywell-insulatedtopreventamajordropinindoortemperaturewhiletheheatpumprunsonreducedpowertobalancegridload.Thismeansthatwell-insulatedbuildingsnotonlyreduceannualandpeakelectricitydemandforheating,butalsofacilitatedemandflexibilityallowingforalongerdurationofheatingloadshiftingwithoutcompromisingthermalcomfort.Heatpumpsystemswillincreasinglyneedtoallowautomated,orremotecontrol,bygridoperatorstoassistwithmanaginghigherwinterpeaks.Minimumenergyperformancestandardscouldbeadaptedtoincludeabasiclevelofsuchcommunicationcapabilities.Inexchangeforprovidingflexibilityservicestothegrid,consumerscouldberewardedwithalowerelectricitytarifforseparatepaymentsbythegridoperator.OctopusEnergyintheUnitedKingdomhasrunaseriesofpilotprojectsofinnovativemodelstogiveamonetaryvaluetoflexibility.Changesinmarketdesigncanalsosupporttheuptakeofheatpumpflexibilitytobenefitallparties.PilotprojectssuchasEcoGridEU,inwhich270householdswithheatpumpsprovidedupto167kWinpeakshaving,helpillustratethepotential.Anotherwaytomanageincreasedelectricaldemand,duetoelectrificationofheatingsystemsisthroughotherefficiencymeasuresinthehome.AnalysisfromSignifysuggeststhatconvertingalllightingintheEuropeanUniontoLEDscouldsavearound188TWhperyear.Thisistheequivalentoftheelectricityrequiredtooperate47millionheatpumps,meaningone-quarterofallEuropeanUnionhouseholds–oraroundallthehouseholdsinGermanyandtheNetherlands.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE103IEA.CCBY4.0.PotentialenergysavingsfromscalingupLEDlightingIEA.Allrightsreserved.Source:Signify,asmodifiedbytheIEA.Policyactioncanfurtherreduceup-frontinvestmentneededfornewheatpumpsOneofthemajorbarrierstoincreasedheatpumpuptakeistheirhigherup-frontcostrelativetofossilfuelboilers.AlmostallEuropeanUnionmemberstates,aswellastheUnitedKingdom,NorwayandSwitzerland,havenowimplementedsupportivepoliciesforheatpumpsandinsulation.EarlyindicationsfromtheGermanFederalsupportprogrammeforheatpumpssuggeststhat148000householdsappliedinAugust2022alone–roughlythesamenumberasduringtheentireyear2021.ItalyisusingataxbenefitunderitsSuperbonusscheme,underwhichheatpumpsareeligible.AsofOctober2022,EUR55billion(USD57billion)hadalreadybeengranted.Drivenbyregulation,thenumberofheatpumpsinstalledinDutchhomesisalsoexpectedtoincreaseby37%thisyear,toalmost100000.Heatpumpsarethepreferredoptionfornewbuilthomes,withathirdofnewinstillationsforexistinghomes.OutsideofEurope,aspartoftheInflationReductionActof2022,theUSfederalgovernmentisofferinga30%taxcredit,uptoaceilingofUSD2000,fortheinstallationofaheatpump.Low-andmoderate-incomehouseholdscanbenefitadditionallybyuptoUSD8000inrebates.InstallingheatpumpswasalsooneofthemostpopularretrofitoptionsintheCanadaGreenerHomesGrant,withabout3200CanadianhomeownersreceivingCAD13.2million(USD9.76million)ingrantssinceJune2022.InNewZealand,theWarmerKiwiHomesprogrammehastargetedlowerincomehouseholds,providingupto80%ofthecostforinsulationandapprovedheatingapplianceslikeheatpumps.HeatinggrantsarecappedatNZD3000(USD1800).0%25%50%75%100%GermanyItalyFrancePolandNetherlands%ofLEDvsnon-LEDLEDNon-LED0204060NetherlandsPolandFranceItalyGermanyTWhEnergysavingsfrom100%LEDconversionEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE104IEA.CCBY4.0.3.4StrengtheningsupplychainsandskillsforfasterdeploymentHeatingtransitionrequiresstrongersupplychainstokeepcostsdownandspeedupdeploymentGiventheambitiousrateofglobalheatpumpdeploymenttargets,theabilityoftheinternationalsupplychainstokeepupwithdemandhascomeintofocus.TheUSgovernment,forexample,hastriggeredtheDefenseProductionActforseveralcleanenergytechnologiesincludingheatpumps.TheActallowsmoreinfluencebypublicbodiesinproductionofheatpumpsaswellasgrantingaccesstopublicfunding.TheInflationReductionActforeseesUSD500millionforthispurposeaspartoftheCleanManufacturingInvestmenttaxcredit.TheActcouldsignificantlyimprovesupplychaincapabilities,leadingtoahigherheatpumpoutputandincreasedpotentialforexport.Themainbottleneckforfastheatpumpdeploymentisthelimitedavailabilityofinstallers.Plumbersandpipefittershavethehighest-rankingshortageforalloccupationsintheEU,closelyfollowedbyelectricians,accordingtotheEuropeanLabourAuthority.InGermany,upto60000additionalheatpumpinstallersareneededtoreachtheEUuptaketargetforheatpumps.Currently,aheatpumpinstallerisnotacertifiedskillinmanyjurisdictions.Inordertostreamlinetraining,qualificationrequirementsshouldbedefinedonasupranationalleveltoensureefficientlabourallocation.Waitingtimesforheatpumpsarecurrentlybetween6-12monthsandpriceshaveincreasedasaresultofthisskillsshortage.Intheshortterm,fossilfuelboilerinstallerscanberetrainedwithinonetotwoweekstoinstallheatpumps,accordingtotheEHPA.Butduetothecurrenthighdemand,additionalnewly-trainedinstallersareurgentlyneededinthemediumterm.However,trainingfornewrecruitstakesthreetofouryears,underliningtheneedforlabourpolicyplanningtoincentivisecareersasheatpumpinstallers.Furthermore,heatpumpinstallationscanbedividedintodifferenttasks,requiringdifferingskilllevels,whichwouldoptimisethedivisionoflabourandallocateresourcesmoreefficiently.InEurope,over20companiesproducingheatpumpsareattemptingtoquicklyscaleupproduction.DaikinisinvestingEUR1.2billion(USD1.25billion)intheirEuropeanproductionsites,focussingmainlyonheatpumpsandproductiondigitalisation.ViessmannisinvestingEUR1billion(USD1.04billion)incleanheatingtechnologiesandStiebelEltronisspendingaroundEUR600million(USD620million)inestablishingadditionalheatpumpproductioncapacity.Manyothermanufacturershaveannouncedlargeinvestmentsin2022,withadditionalEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE105IEA.CCBY4.0.productionlinesexpectedtobeoperationalin2023-24andnewproductionsitesexpectedby2025.Ina2022surveyamongEHPAmembers,about75%ofrespondentsconsidereditpossibletoachievethe15%annualgrowthratenecessarytoreachRePowerEUtargetsand,inmanycases,suggestedratesofover25%canbeachieved.However,theongoingglobalshortagesofseveralinputmaterials,especiallysemiconductorchips,copper,aluminiumandsteel,hasputupwardpressureoncostsandslowedsomeexpansionplans.Compressorsarethehighestcostcomponentofaheatpumpandinmostcasesareboughtfromspecialisedmanufacturers.However,compressorsarealsousedinmanyothertechnologiesresultingindemandcompetitioninthecompressormarket.Theavailabilityofrefrigerantsandskilledlabourintheproductionofheatpumpsisalsoarisingconcern.Productionprocessoptimisationandcontrolledtestingenvironmentsarealsokeytoolsbyindustrytomanagetheseconstraints.SupplyconstraintsareaffectingvehicleavailabilityWhilesalesofEVs(BEVsandPHEVs)andhybrids(fullandmild)havebeenincreasing,carproductiongenerallyisstrugglinginthefaceofsupplyconstraints.Bymid-July2022,over2.5millioncarshadbeencutgloballyfromproductionlines,mainlyinEuropeandNorthAmerica,largelyasaresultofashortageofsemi-conductors.EvenpriortotheCovid-19pandemic,demandforsemi-conductorsexceededsupply.ThesituationwassubstantiallyexacerbatedbyCovidandtheconflictinUkraine,adverselyaffectingthesupplyofrawmaterialstotheautomotivesector.Furthermore,thereisanongoingskillsshortage,particularlyinbatteryproductionforelectricvehiclesinEuropeandAsia.InFrance,Germany,theUnitedKingdomandtheUnitedStates,thelackofsupplyofnewcarsasaresultofthesemi-conductorshortageandincreasingpricesofrawmaterialshashadaknock-onimpactontheusedcarmarket.Withthesupplyofnewcarslow,someconsumersturnedinsteadtothesecond-handmarket,leadingtoincreasedsalesandpricesforusedcars.Demandissuchthattherearereportsofelectricvehiclesbeingresoldforaprofitratherthanbeingused.InApril2022,Fordstoppedtakingordersforitssignatureelectriccross-over,theMach-E,becausetheywerenotabletoproduceasufficientnumberofvehiclestomeetdemand,althoughproductionhassinceincreased.NissanhasexpressedconcernthatthesupplyconstraintsfacingelectricvehiclesintheUnitedStateswillmeanthatEVswillnotbeabletofullycapitaliseonhighfuelprices.SimilarimpactshavebeenseeninEurope.IntheUnitedKingdom,bymid-2022therewerelongwaitinglistsforconsumerstoreceiveanewEV;forsomemodelsthewaitingtimeisnowuptotwoyears.EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE106IEA.CCBY4.0.StrengtheningtheenergymanagementskillsbaseiskeyforimprovementinenergyefficiencyAlackofaccesstoskilledworkersisoneofthekeybarrierstoimplementingenergyefficiency.Thisextendsthroughouttheenergyefficiencydeliverysupplychain,fromspecialistconsultancytoskilledprocessfloorworkforces.Alackofexperiencedenergyadvisorsisreportedlynegativelyaffectingthedeliveryofservices.Embeddedthroughoutits2022IndustrialDecarbonisationRoadmap,theUSDepartmentofEnergyrecommendsarangeofactionstoincreaseskillsandknowledgethatareessentialtoachievingtheroadmaptargets.Implementingenergyefficiencyprojectsisextremelylabour-intensive,especiallyinthebuildingssector.RecentIEAanalysisfromthe2022WorldEnergyEmploymentReportfoundthataround10.9millionpeoplewereemployedinenergyefficiencyinbuildingsandindustryin2019,withone-thirdofthesejobslocatedinChina,followedbyaround2millioninNorthAmerica.SuccessfulexamplesofupskillinghighlightedintheIEAreportSkillsDevelopmentandInclusivityforCleanEnergyTransitionsincludeIndia’sSkillCouncilforGreenJobs,EnergyAcademyofGermanyandJordanandthePhilippines’GreenJobsActof2016.Anexampleofaninitiativeunderwayin2022istheBrazilianGovernment’sprojectPotencializEE(InvestmentsTransformingEnergyEfficiencyinIndustryProgramme),whichpromotesenergyefficiencyinindustrialSMEs.Employmentinenergyefficiencybyend-usesectorandeconomicsector,2019IEA.CCBY4.0.Note:HVAC=Heating,ventilation,andairconditioning.Otherincludesemploymentinutilities,professionals,wholesale,andtransportsectors.Source:WorldEnergyEmploymentReport.00.51.01.52.02.53.0ManufacturingConstructionOtherMillionemployeesBuildings(retrofitsandHVAC)00.51.01.52.02.53.0ManufacturingConstructionOtherIndustryEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE107IEA.CCBY4.0.3.5MeetingclimategoalsGreaterefficiencyprogresscandriveloweremissionsthisdecadeDoublingtherateofglobalenergyintensityimprovementfromthe2%peryearachievedfrom2010to2020tojustover4%from2020-30isnecessarytoputtheworldonapathwayconsistentwiththeNetZeroScenario.Doingsowillrequireenhancedactiononawidespectrumofenergyefficiencyanddemand-sidemeasurescoveringtechnicalefficiency,behaviourchangeandelectrification,aswellasmaterialefficiency,digitalisationandfuelswitchinginindustry.TheIEA’sValueofEarlyActiononEnergyEfficiencyreportestimatesthatallthesemeasurescanhelpavoidabout95EJand5GtCO2peryearby2030intheNetZeroScenario.Thiscompareswithascenariobasedoncurrentefficiency-relatedpolicies(STEPS)wheretotalfinalenergydemandisaround18%higherin2030insteadof5%lowerintheNetZeroScenario.Thegreatestshort-termenergysavingspotentialisinthebuildingsandtransportsectors,witharound37EJand34EJofavoidedenergydemandby2030available,respectively.Theenergysavingspotentialofindustryby2030isabouthalfasmuchdespiteitbeingthelargestenergyconsumingend-usesector.Intermsoffuels,efficiency-relatedavoidedenergydemandmeasurescouldhelpdisplacearound55EJ,or30mb/d,ofoildemandand23EJ,or650bcm,peryearofnaturalgasgloballyby2030.Globalfinalenergydemand,2010,2020,andbyscenario,2030IEA.CCBY4.0.Note:Totalavoidedenergydemandof95EJincludesfurtherenergysavingsof6EJinothersectors(agriculture).EnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE108IEA.CCBY4.0.TheNetZeroScenarioalsoincludeslargeenergysavingsfromprovidingaccesstocleanandefficientcookingandheatingtothosewholackittoday.By2030,around20EJcanbeavoidedbyreducingtheuseoftraditionalbiomasslikewoodandcharcoal.Thiscandramaticallyimprovethelivesofbillionsofpeople,particularlywomenandchildren,whosehealthisdisproportionatelynegativelyaffectedbyindoorairpollution.Theseenergysavingsarealsoachievedevenastheeconomygrowsby40%by2030,andaround800millionmorepeoplegainbetteraccesstoenergyservices.Improvingtheefficiencyofinternalcombustionenginevehiclesthroughtechnicalefficiencymeasuresprovidesoneofthelargestopportunitiestoreduceenergyconsumptionby2030intheNetZeroScenario.TechnicalandmaterialefficiencymeasuresinbuildingsandgreaterreuseandrecyclingratesofmaterialsusedinindustryalsohavesignificantpotentialtoavoidenergydemandandreduceCO2emissions.ElectrificationisamajordriverofavoidedenergydemandintheNetZeroScenario,primarilythroughthefasteruptakeofelectricvehicles.TheavoidedCO2impactofelectrificationintransportisrelativelyhighduetothesimultaneoustransitiontowardsrenewableenergyintheelectricitygeneration,whichrisesfrom28%in2020to61%by2030.Avoidedenergydemandbyfuelsource,betweenStatedPoliciesScenarioandNetZeroScenario,2030IEA.CCBY4.0.TheriseofvariablerenewableenergyintheNetZeroScenarioalsounderscorestheimportanceofenhancedelectricitysystemflexibility.Thisisdeliveredthroughthegreateradoptionofdigitalsensorsandcontrolsinparallelwiththe-50-40-30-20-1001020IndustryTransportBuildingsEJOtherModernbioenergyTraditionalbiomassElectricityOilGasCoalNetavoidedenergydemandEnergyEfficiency2022Chapter3.EnergyefficiencyandtheenergycrisisPAGE109IEA.CCBY4.0.electrificationofroadtransport,heatinginbuildingsandindustrialprocesses.Suchsmartflexibilityisneededtosmooththeloadcurveandhelpalignenergydemandwhenrenewableenergysupplyisatitshighestduringtheday.Digitalisationandsmartcontrolsofefficientend-usetechnologiesalsoplayamuchgreaterroleinsupportingpowersystemefficiencyandreliabilityintheNetZeroScenario.Forexample,end-usetechnologiesthatcantimeenergyconsumptiontowhenrenewablepowerisatitspeakcanbringdownenergybillsandreduceCO2emissionsforusers.CO2reductionbyefficiency-relatedmitigationmeasure,intheNetZeroScenario2020-2030,IEA.CCBY4.0.-1800-1600-1400-1200-1000-800-600-400-2000TechnicalefficiencyElectrificationBehaviourchangeOtheravoideddemandMtCO2AgricultureIndustryBuildingsTransportEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE110IEA.CCBY4.0.Chapter4.SpecialfocusonenergyefficiencyinASEANcountries4.1OverviewofASEANenergyuseEnhancingefficiencyinASEANcountriesisvitaltotheglobalcleanenergytransitionInthischapterwelookmorein-depthatoneoftheregionswiththeworld’sfastestgrowingenergydemandandoptionsforacleanenergytransition.Regionalambitionstoachievenetzeroemissionsandcarbonneutralityvary:LaoPeople’sDemocraticRepublic(LaoPDR),Malaysia,Singapore,Thailand,andVietNam(by2050);Indonesia(by2060orsooner);BruneiDarussalamandCambodia(policiesannounced,thoughnospecific2050targetsyet),whilethePhilippinesandMyanmarhavenotmadeanyofficialnetzeroannouncements.Whileenergydemandgrowthhasmostrecentlyslowedduetothepandemicandpriceincreases,in2010-2020electricitydemandgrewby63%intheASEANregioncomparedwith24%globally.EnergyconsumptioninASEANcountrieshasdoubledsince2000,fuellingaregionaleconomythatisnowtwoandhalftimeslargerwithacurrentpopulationofover660millionpeople.Thisincreaseinconsumptioncanbelargelyattributedtorisingstandardsoflivingalongsidepopulationgrowthandurbanisation.Atthesametime,theASEANregionachievedanenergyintensityreductionof21%by2018,surpassingitsaspirationaltargetof20%in2020(over2005levels).Whilethereisadiversesetofenergyprofilesandprioritiesintheregion,allcountrieshavecollectivelyendorsedregionaltargetsaimedatacceleratingtherateofimprovementsinenergyefficiency.TheASEANPlanofActionforEnergyCooperation(APAEC)outlinestheregion'splantoreduceenergyintensityby32%in2025,basedon2005levels,andencouragefurtherenergyefficiencyandconservationefforts,especiallyinthetransportandindustrysectors.TheASEANCentreforEnergyisthemainmultilateralbodywhichaimstoacceleratetheintegrationofenergystrategieswithintheregion.EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE111IEA.CCBY4.0.EnergyefficiencytargetsinASEANcountriesCountryEfficiencypolicytargetsBruneiDarussalamReducetotalenergyconsumptionby63%frombusiness-as-usual(BAU)levelsby2035.EVshareoftotalannualvehiclesalestoreach60%by2035.CambodiaBy2030andrelativetoBAU,cutenergyconsumptionby19%.IndonesiaReduceenergyintensityby1%peryearto2025.LaoPDRReducefinalenergyconsumptionby10%fromBAUlevel.Malaysia52233GWhofelectricitysavingsovera10-yearperiodfrom2016to2025againstBAU,correspondingtoanelectricitydemandgrowthreductionof8%.MyanmarLowerprimaryenergydemand8%by2030fromthe2005level.PhilippinesReduceenergyintensity40%by2030fromthe2010level.Decreaseenergyconsumption1.6%peryearby2030frombaselineforecasts.Reduceenergyintensityandtotalenergyconsumptionby24%relativetotheBAUlevelby2040.SingaporeImproveenergyintensityby35%by2030from2005levels.ThailandReduceenergyintensityby30%by2036from2010levels.Source:IEASoutheastAsiaEnergyOutlook2022,updatedforCambodiaandMalaysia.Energyefficiencyimprovementshavebeenkeytohelptemperthegrowthofenergyconsumption,three-quartersofwhichisstillprovidedbyoil,coalandnaturalgas.From2010to2020theuseofcoaldoubledintheregion’sfuelmix,drivingtheregion’semissionsup42%,from1.2GtCO2to1.7GtCO2.Powergenerationhasalmosttripledinthepasttwodecades,withthelargestincreasecomingfromcoal-firedpowerplants.Renewablesareincreasingquickly,andin2020theyaccountedfor255TWhorabout23%oftotalgenerationof1100TWh,withcoalproviding43%andgas32%.ThereisadiverserangeofenergyintensityprofilesacrosstheregionSevenofthetencountriesintheregionarelessenergyintensivethantheworldaverageandthreeareabove.Singapore,whichhastheregion’shighestpercapitaincomeandaneconomydominatedbyservices,usesabouthalfasmuchenergytoproducethesamevalueofGDPasBruneiDarussalam,whichistheregion’smostenergy-intensiveeconomy.ThisisbecauseBruneiDarussalam,whichhastheregion’ssecondhighestpercapitaincome,hasaneconomywhereenergy-intensiveindustriesbasedonoilandgasplayalargerrole.EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE112IEA.CCBY4.0.TheslowdowninenergyintensityimprovementsobservedgloballyoverthesecondhalfofthelastdecadewasalsoexperiencedintheASEANregion,withanannualrateof2.8%peryearfrom2010to2015slowingto0.9%from2015to2020.In2021,energyintensityactuallyworsened,risingbyhalfofapercentagepointfollowingexceptionallystronggrowthinindustrialenergydemand.Primaryenergyintensity,intheASEANregion(left),2020andannualintensityimprovement,2010-2020(right)IEA.CCBY4.0.IndonesiaisthemostpopulouscountryintheASEANregionwithapproximately275millionpeopleandhasthelargesteconomy.Itaccountsforaroundone-thirdofthegroup'senergydemandandisthethirdmostefficientintermsofitslevelofenergyintensity.4.2SectoralconsiderationsEnergydemandhasgrownrapidly,butdiffersacrosssectorsIndustryisthelargestenergyconsumingsectorintheASEANregion,responsibleforaround44%offinalenergydemand,followedbytransportwith27%andbuildingswith23%.EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE113IEA.CCBY4.0.Growthinindustrialenergydemandacceleratedinthesecondhalfofthelastdecade,risingfrom1.6%peryearin2010-15to8.1%peryearduring2016-2019-atotalincreaseof33%overthedecade.Thistrendwasamajorcatalystfortheslowdowninenergyintensityimprovement.Steel,cementandpetrochemicalproduction,whilecriticalfornewinfrastructureandeconomicdevelopment,areparticularlyenergyintensive.Energyconsumptioninthetransportsectorrose40%overthelastdecade,withannualgrowthof5%to6%eachyeardrivenbyincreasingownershipofpassengercars,two-andthree-wheelervehiclesandagreateruseoftrucks.Oilproductsaccountfor90%oftransportfueluse.Shareofchangeinenergyconsumptiontrends,intheASEANregionandWorld,2010-2020IEA.CCBY4.0.Energyconsumptioninbuildingsacrosstheregionfellby16%from2010to2020,ledlowerbya53%falloverthedecadeoftraditionalbiomassforcookingandspaceheating.Around95%ofhouseholdsnowhaveaccesstoelectricityand70%haveuseofmoreefficient,cleancookingsuchasLPGandimprovedcookstoves.Thebuildingssectorhasalsoledtheincreaseinelectricityconsumption,drivenbyurbanisationwiththenumberofpeoplelivingincitiesrisingby70%since2000.This,alongwithincreasingwealth,hasledtostronggrowthinairconditionerandapplianceuse,whilethenumberofpeoplewithaccesstorefrigerationhasdoubledsince2000.-60%-40%-20%0%20%40%60%80%TotalfinalconsumptionIndustryTransportBuildingsTraditionalbiomassElectricity%change2010-2020ASEANWorldEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE114IEA.CCBY4.0.Annualchangeinenergyconsumption,intheASEANregion,2000-2021IEA.CCBY4.0.EnergyuseinASEANheavyindustriescontinuestodominatethesectorTheIndustrialsectorisnothomogenousacrossASEANcountries.Therangeofindustriesvarieswidelyacrossthecountries,fromprimarilyoilandgasinBruneiDarussalam,toamixoftextiles,construction,machinery,cement,chemicals,pulpandpaperandmanyothersmallsectorsinThailand.Furthermore,datacoverageforASEANsubsectorsdiffersgreatlybetweencountries,makingdetailedanalysisoftheareadifficult.Thisdatagapresultsinapproximatelyone-thirdofthefinalindustrialenergydemandinASEANcountriesbeingunspecified.However,threeheavyindustries–ironandsteel,cement,andchemicals–accountfor64%ofindustrialenergydemandinSoutheastAsia.-12%-10%-8%-6%-4%-2%0%2%4%6%8%10%2010-20152016-2019202020212000-20102010-20152016-2019202020212000-20102010-20152016-2019202020212000-20102010-20152016-201920202021TFCIndustryBuildingsTranportAnnualchangeEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE115IEA.CCBY4.0.Percentageofindustrialenergydemandbysubsector,inSoutheastAsia,2020IEA.CCBY4.0.Source:IEAbasedondatafromtheASEANCentreforEnergy(ACE),‘7thASEANEnergyOutlook’.IronandsteelmanufacturingisoneofthefastestgrowingsectorsinASEAN,withenergyusemorethantriplinginthelastdecade.From2016and2020steelproductionalmostdoubledfrom8.6Mtto16.7Mt,ledbysharplyhigherlevelsinIndonesia(437%),Malaysia(380%)andVietNam(174%).By2050,ASEANironandsteelenergyuseisexpectedtoincreaseatleastfour-fold,to43.9Mtoe.Growthisalsoexpectedinthechemicalsector,whichisprojectedtogrowthree-tofour-foldfrom2020to2050.Currently,about65%ofenergydemandinthechemicalindustryismetwiththeuseoffossilfuels,comprisedofnaturalgas(40%),oil(19%)andcoal(5%).Despitethedominanceoflargeindustryinenergyuse,lightindustryplaysanimportantrolethroughouttheregionandisincreasinglyafocusareaforenergyefficiencyimprovements.Thereare70millionMicro,SmallandMediumenterprises(MSMEs)inASEAN,accountingforaround97%ofthetotalnumberofbusinessesintheregion.TheMSMEsprovide85%ofemployment,45%ofGDPand18%ofnationalexports.AnExperts’RoundtableonenergyefficiencypolicyrecommendationsforSoutheastAsia,convenedbytheIEAin2017,highlightedfourindustry-specificrecommendationstoaddressbarriersandhelprealisethetremendousenergyefficiencypotentialoftheregion.Giventhediversityofindustryacrosstheregionandwithincountries,itwasrecommendedthatgovernmentsshouldconsider33.8%19.8%10.8%10.1%7.1%7.1%6.9%2.7%1.8%NonmetalicmineralChemicalIronandsteelMiningTextilesandleatherPulppaperFood,beveragesandtobaccoConstructionOtherindustry0%5%10%15%20%25%30%35%40%ProportionofenergydemandbysubsectorEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE116IEA.CCBY4.0.policiesthathavebroadapplicationacrossindustrialsub-sectorsandprocesstypes,withastrategicfocuson:•Energymanagementinindustry(ISO50001,ISO5005).•High-efficiencyindustrialequipmentandsystems(MEPS).•Energyefficiencyservicesformicro,smallandmediumenterprises(MSMEs).•Complementarypoliciestosupportindustrialenergyefficiency,suchastheformingofcoalitionsofstakeholders,creatingactiverolesforESCOsinpromotingenergyefficiencyandsharingbestpracticesamongcountries.Someprogresshasbeenmadeontheserecommendations.Forexample,sevenASEANcountries(Indonesia,Malaysia,Myanmar,thePhilippines,Singapore,ThailandandVietNam)arecurrentlyimplementingISO50001,andcertificationsincreasedby24%from2018to2021.Moregenerally,since2017mostoftheASEANcountrieshaveintroducedpoliciesrelatingtoindustrialenergyefficiency,whetherthroughtheirNationallyDeterminedContribution(BruneiDarussalam,Malaysia,Myanmar,Thailand),theintroductionorstrengtheningofMEPS(VietNam),greenindustrystandards(Indonesia),energyconsumptiontargetsforindustry(Cambodia),EnergyEfficiencyOpportunitiesAssessments(Singapore)oraNationalEnergyEfficiencyandConservationPlan(Philippines).However,thereremainssignificantscopetostrengthentheimplementationofthesemeasures.EfficiencystandardsandelectrificationarekeyforthetransportsectorInthetransportsector,fueleconomystandardsplayakeyroleinreducingfutureoilrequirements.TheASEANFuelEconomyRoadmaphasatargetofanaveragefueleconomyof5.3litresofgasolineequivalent(Lge)per100kmby2025fornewlight-dutyvehicles,thisisincomparisonwithanestimated7.2Lge/100kmin2015.Todate,however,noneoftheASEANmemberstateshaveadoptedfueleconomyorCO2emissionstandardsforanymodesoftransport.Forpassengercars,positivestepshavebeenmadeinIndonesia,Malaysia,ThailandandSingaporethroughanagreementontechnicalmeasurementprocesses.Arangeofincentivesandinformationtofacilitateimprovementsinfueleconomyareinuse.Forpassengercars,differentiatedtaxationisemployedinIndonesia,Malaysia,thePhilippines,SingaporeandThailand.ForIndonesia,thiswasupdatedtofocusonCO2emissionsandenginesizewiththeregulationtakingeffectinOctober2021.LabellingtoprovideinformationtoconsumersonfueleconomyandCO2/kmemissionsismandatoryinSingapore,ThailandandVietNamandvoluntaryinMalaysiaandthePhilippines.EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE117IEA.CCBY4.0.Two-andthree-wheelersarekeytransportmodesinASEANcountriesandprovideopportunitiesforelectrification.InVietNam230000electrictwo-andthree-wheelersweresoldin2021constitutingaround10%oftwo-wheelersales.Electricpassengerlight-dutyvehiclescomprisedonly1%ofsalesintheASEANregionin2022.ThailandandIndonesiaaimtobecomeleadersinEVmarkets.Thailandhasannouncedplanstoachieve30%ofdomesticvehicleproductiontobezero-emissionvehicles(ZEVs)by2030and100%ofnewvehicleregistrationstobeZEVsby2035.AsofSeptember2022,Indonesiarequiresgovernmentofficestoprocureanduseelectricvehicles.InJanuary2022,Malaysialaunchedtaxincentivestobenefitmanufacturersandpurchasers,includingtaxexemptionsforimportsandsales,aswellastaxreliefforthoseowninganelectricvehicle.InMay2022,Thailandannouncedmeasurestoimplementelectricvehicletaxandcustomsincentivesfor2022-25.TosupportthisgrowingEVmarket,Indonesiarecentlycreatedagovernment-ownedbatterycorporationthataimstobuild140GWhofbatterycapacityby2030,ofwhich50GWhwillbeforexport.Incomparison,today’sglobalbatterymanufacturingproductioncapacityisabout871GWh.AsofSeptember2022,Indonesiarequiresgovernmentofficestoprocureanduseelectricvehicles.SpacecoolingiskeyforenergyefficiencyinbuildingsDespitehavingthesmallestshareoffinalenergyconsumptionintheASEANregion,thebuildingssectorprovides1.4EJor46%oftheavoidedenergydemandpotentialintheSustainableDevelopmentScenariofrom2020to2030.Moreefficientairconditionerscanplayamajorroleinavoidingelectricitydemand,andthephaseoutoftraditionalbiomassforcookingcanleadtosignificantgainsinoverallavoidedenergydemandinbuildings.Energydemandbyfuelandavoidedenergypotential,intheASEANregion,intheStatedPoliciesScenariovsSustainableDevelopmentScenario,2010-2030IEA.CCBY4.0.Note:STEPS=StatedPoliciesScenario;SDS=SustainableDevelopmentScenario.EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE118IEA.CCBY4.0.Spacecoolingisamongthefastestgrowingendusesintheregion,withenergyconsumptionexpectedtomorethanquadrupleby2040.Thisreflectsthegrowingpopulationsandrisingincomesinrelativelyhotandhumidclimates.Asaresult,electricitydemandforspacecoolingisprojectedtorisefrom88TWhin2019to314TWhby2040,withabout200TWhtocomefromresidentialbuildings.Residentialbuildingenergyconsumptionbyenduse,intheASEANregion,2018-2040IEA.CCBY4.0.Spacecoolingisalsoestimatedtoaccountforalmost30%ofpeakelectricitydemandintheregionby2040,upfromaround10%in2017,andwillrequireabout150GWofadditionalgenerationcapacitytomeetthepeaklevels.Policyactionsupportingthedeploymentofmoreefficientairconditioners,alongwithothermeasuressuchastheuseofefficientfansandbuildingenvelopeimprovements,couldhelpASEANmemberstatessave110TWhofelectricityin2040,cuttingtheprojectedspacecoolingenergyusebyoverone-third.ThesesameactionswouldalsoreduceGHGemissionsbyover55MtofCO2in2040,which,alongsidedecarbonisationoftheelectricitysupply,couldseeCO2emissionsfromspacecoolingintheregiondropbelow2018levels.NewmarketdataforThailandconfirmthatmoreefficientairconditionersprovidelowerlifecyclecosts.Annualelectricitycosts,includedontheenergylabelfortenyearsofoperation,helpconsumersmakeinformedchoices.Inmanycasesthemoreefficientairconditioneralsoresultsinno,oranegligible,increaseintheupfrontpurchasepriceoftheunit.Further,airconditionerswithlowercoolingcapacityhavelowerlifecyclecoststhanthosewithhighercoolingcapacity.0100020003000400050000200400600800100020182025203020352040kWhperhouseholdTWhCoolingAppliancesLightingCookingWaterheatingSoutheastAsiaAnnualelectricityconsumptionperhousehold(rightaxis)WorldaverageEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE119IEA.CCBY4.0.Lifecyclecostvsefficiencyofnewairconditioners,inThailand,2022IEA.CCBY4.0.Notes:AnalysisbasedonmarketdatacollectedthroughPremisecrowdsourcing.Smallcapacity:6000BTU/hr<CC≤11000BTU/hr,mediumcapacity:11000BTU/hr<CC≤15000BTU/hr,largecapacity:15000BTU/hr<CC≤20000BTU/hrNormalisedto12000BTU.Thelifecyclecostisbasedonthepurchasecostanda10-yearlifetime.Besidesimprovingenergyefficiencyofairconditionersandfans,somecountriesintheregionarealsomakingeffortsonefficientdistrictcooling.InMalaysia,theMegajanaplantprovidesdistrictcoolingservicestobuildingsinCyberjaya.Thissystemreducesenergyconsumption,lowersoperatingcostsofbuildingsandensuresenvironmentalsustainabilitysupportingCyberjayainbecomingagreencity.Agreendistrict,NorthgateCyberzone,inthePhilippines,alsoreliesondistrictcoolingtomeetthermalcomfortneedsandreducesrelatedenergyuseby40%.SingaporehasstartedthedevelopmentofasmartPunggolDigitalDistrict(PDD),withplanstouseefficientdistrictcoolingtechnologiesforabusinesspark,community,retailoutlets,andtransportationnodeswithinthedistrict.Theplantwillhaveacoolingcapacityofcloseto30000refrigeration-tons,equivalenttocooling8000four-roomapartments.ThedistrictcoolingsystemwillbeintegratedintotheOpenDigitalPlatform,togetherwithasmartgridandsmartmetering,whichwillallowforreal-timetrackingandoptimisationofenergyuseatthedistrictlevel.1000150020002500300035004000450033.544.555.566.57Lifecylcecosts(USD)EfficiencyRating(W/W)SmallMediumLargeEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE120IEA.CCBY4.0.EfficiencymeasuresincommercialbuildingsgreatlyreduceenergyconsumptionArecentIEAassessmentfoundthatefficiencyactionsinnon-residentialbuildingsintheASEANregioncouldreduceabuilding’senergyuseby20%-70%,dependingonthebuildingtypeanddepthofmeasures.Thisincludesefficientventilationandcoolingsystems,LEDlightingandsmartlightingcontrols,shading,insulation,rooftopsolarphotovoltaicsystems,buildingautomation,energymanagementsytems,andsmartmetering.Officebuildingsdemonstratedthelowestenergyuseintensities,whileretailspaceconsistentlyshowthehighestvaluesacrossdifferentASEANcountries.Retailbuildingstendtoconsumemoreenergythanothercommercialbuildingslikeofficesorhotels,duetouseofmoreenergy-intensiverefrigerationsystems,limitedabilitytoreduceenergyusethroughbehaviour,andlackoftrainingforoperatingpersonnel.Thisshowstheimportanceofcapacitybuildingandbehaviouralchangesforimprovingactualenergyperformanceofbuildings.Energyuseintensity(EUI)ofnon-residentialbuildings,inselectedASEANcountriesIEA.CCBY4.0.Notes:TheEUIdatawerecollectedfromgovernmentdatabases,availablepublicationsandothersecondarysourcescoveringmorethan700buildingsoffournon-residentialbuildingtypes(offices,retail,hotels,hospitals)infiveASEANcountries:432inSingapore;153inIndonesia;123inLaoPDR;53inBruneiDarussalam;and21inMalaysia.Gridinteractivebuildings,smartchargers,andsmartmeterscanprovideflexibilityandefficiencyASEANhassettargetstoachievea23%renewableenergyshareintotalprimaryenergysupplyanda35%shareofrenewableenergyininstalledpowercapacityby2025.GridinteractivebuildingsandsmartchargingforEVscanhelptomanage0100200300400500600OfficeRetailHotelHospitalEnergyUseIntensity(kWh/m²)SingaporeMalaysiaThailandIndonesiaBruneiDarussalamLaoPDREnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE121IEA.CCBY4.0.thisexpandingshareofvariablerenewableenergy(VRE)toensurethereliability,flexibilityandsecurityofelectricitygridsaselectricitydemandgrows.Grid-interactiveefficientbuildingsareenergyefficientbuildingswithsmarttechnologiescharacterisedbytheactiveuseofdistributedenergyresourcestooptimiseenergyuseforgridservices,occupantneedsandpreferences,andcostreductionsinacontinuousandintegratedway.IntheASEANregionthenumberofsmartbuildingsisestimatedtomorethantripleby2026andtoexceed4million.Thefive-storeyextensiontoaSchoolofDesign&EnvironmentbuildingattheNationalUniversityofSingapore,completedin2019,combinesenergyefficientstrategies,on-siterenewableenergygenerationandinteractionswiththecampus’grid,whichenablesthebuildingtoproduceapproximately30%moreenergythanitneedsduringtheyear.Dailysurplusesarefedbackintothecampusgridandusedbysurroundingbuildings.Singapore,Malaysia,thePhilippines,andThailand,havestartedimplementationofpilotprojectsonpeer-to-peerrenewableenergytradingusingblockchaintechnology,withthehelpof‘regulatorysandboxes’.IntheseprojectsalimitednumberofbuildingswithinamicrogridcangenerateelectricitythroughrooftopsolarPVsystemsandsellpartofthiselectricitytootherbuildingswithinthenetwork.TheprojectinBangkokistheworld’slargestreal-timeblockchain-based,peer-to-peerelectricitytradingpilotproject.Asof2021,itincludeda1.2MWmarketplacewithtenbuildingsandprovidedevidencetoconsideringregulatorychangesforfurtherreplicationbeyondtheregulatorysandbox.Smartmetersarekeyenablersofinteractionsbetweenbuildingsandthegrid.Malaysia’snationalelectricitysupplierTNBrolledoutfreeinstallationofsmartmetersstartingin2016.Bytheendof2021,1.8millionwereinstalledinthestatesofMelakaandKlangValleyandby20269.1millionareexpectedtobeinstalled.BruneiDarussalamisalsoplanningtoinstallnewsmartelectricityandwatermetersin200000homesandbuildingsfrom2021to2026.Thesemeterswillallowtheconsumerstomonitorandmanagetheirenergyandwateruseonlineandreloadcreditontheunifiedsmartmeteringsystemthroughthewebsiteorsmartphones.Arapidtransitiontocleancookingisimprovingthelivesofmillions,especiallywomenandchildrenThenumberofpeoplewithaccesstocleancookingtechnologieshasbeencontinuouslyincreasingintheregion-ithasalmostquadrupledduringthepasttwodecades.However,asof2020morethan200millionpeopleintheregionstilllackaccesstocleancooking,havingtorelymainlyontraditionalbiomass.EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE122IEA.CCBY4.0.Thecostsforhealth,genderequality,andtheenvironmentduetofailuretoachieveuniversalaccesstocleancookinginSoutheastAsiaareestimatedatUSD280billionperyear,withwomenandchildrenatbeingmoreseverelyaffected,becauseoftheirhighershareoftimespentnearcookingfumescomparedwithmenintheregion.Shareofpopulationwithaccesstocleancooking,inASEANcountries,2000,2010and2020IEA.Allrightsreserved.Source:ESCAP(2022)asmodifiedbytheIEA.Whilecloseto87%ofpeoplelivinginASEAN’scitiescookwithmodernandrelativelycleantechnologies,thisnumberbarelyexceeds50%forruralpopulationsacrosstheregion.Forexample,inthePhilippinesonly28%oftheruralpopulationhaveaccesstocleancooking,inCambodiathefigureis25%,inMyanmar11%,andinLaoPDRitisjust2.5%.In2018,around74%ofresidentialcookinginASEANusedtraditionalbiomasssources,withwoodbeingthemostcommonfuel.InIndonesia,theregion’slargestenergyconsumer,theuseoftraditionalbiomassrepresentedalmost30%ofthebuildingssector’senergydemandin2021.CookingwithLPGisalow-cost,short-termoptionforreplacingtraditionalbiomass,howeverthisstillreliesonafossilfuelandhasalowerefficiencythanelectricstoves.In2021,almost50millionIndonesianhouseholdsreliedonLPGforcookingwhile11millionhouseholdswerecookingwithelectricity.Withoutsubstantialpolicyinterventions,thehighshareofbiomassisexpectedtostayrelativelysteadyuntil2040.Policieshavefocusedonimprovingthequalityoftraditionalbiomasscookstoves,replacingthemwithmodernfuelssuchasLPG,keroseneandelectricity,andutilisingrenewablesourcesforcleancooking,includingbiogas,solar,andbioethanol.OnesuccessfulprogrammetoreplacekerosenewithLPGforcookingreducedinfantmortalityby16%-34%,andloweredtheproblemoflowbirthweightofbabiesby8%-25%.Cookingwithtraditionalbiomassresultsinnegativeimpactsonpeople’shealthwithexposuretosmokelinkedwitharangeofconditionsincludingacuteand0%20%40%60%80%100%BruneiDarussalamSingaporeMalaysiaIndonesiaThailandVietNamPhilippinesCambodiaMyanmarLaoPDR%populationwithcleancookingaccess200020102020EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE123IEA.CCBY4.0.chronicrespiratorydiseases.IndonesiaandthePhilippineshavethehighestprematuredeathratesper100000peopleintheASEANregionfromindoorairpollutionwhileinCambodiaitisestimatedtoresultin14000prematuredeathsperyear.Raisingawarenessaboutthebenefitsofcleancooking,creatingdemand,offeringresults-basedfinancingandbuildinglocalcapacityformanufacturingandmaintenanceofequipmentareamongkeyfactorsforenhancingthelocalmarketforencouragingtheadoptionofcleancookingtechnologies.4.3RaisingenergyefficiencyambitionStrongerpoliciesandregulationswillcountergrowingenergydemandfromappliancesDespitethedifferingsizes,characteristicsandpotentialforenergysavingsofend-usesectorsacrosstheregion,substantialprogresscanbemadeineachsectorbyadoptingapolicypackageapproachthatbringstogetherregulatoryandinformationinstrumentswithfinancialandnon-financialincentivesunderonecoordinatedframework.InApril2022,theIEAandASEANCentreforEnergyshowedhowsuchanapproachcouldbedevelopedinbuildingsacrosstheregion,intwoRoadmapsforEnergyEfficiencyinASEAN(BuildingsandConstructionandSpaceCooling).Governmentsacrosstheregionarebeginningtoadoptsuchpolicypackages,particularlyforappliancesandbuildings.Inappliances,standardharmonisationisavitalsteptowardsmarketintegrationandimprovedappliancesintheregionbyreducingproductioncostsforefficientappliances.Theprocesscanbeacceleratedbyusingaregionalproductefficiency“ladder”forairconditionersandfans.Laddersareatoolforvisualisingthecurrentandfutureefficiencylevelsthatpolicypackagemeasuresset,suchasMEPSandlabellevels.Theapproach,asdescribedbytheIEA-ledSuper-efficientEquipmentandApplianceDeployment(SEAD)InitiativeandProductEfficiencyCalltoAction,simplifiesregulationsettingandcompliance,andallowspolicymakerstoraiseambitionmorequickly.IndonesiajoinedtheSEADInitiativeandCalltoActionin2021,demonstratingacommitmenttoimprovingenergyefficiencyofappliances.Anumberofcountrieshaverecentlyintroducednewappliancepolicies,withaparticularfocusonairconditioners.Asaresult,allcountriesintheregionnowhavesomelevelofMEPSandlabellingpolicyinplaceorunderdevelopmentforthetechnology.BruneiDarussalamimplementedefficiencystandardsandlabellingregulationsforelectricalappliancesin2022.Theyfocusprimarilyonairconditioningsystems,whichaccountforabout60-70%ofelectricityconsumptioninbuildings,andincludemeasuresforstandards,labellingandimprovedEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE124IEA.CCBY4.0.compliance.ItisestimatedthatthesemeasurescouldreduceBruneiDarussalam’senergyintensityby45%by2035relativeto2005.InIndonesia,thegovernmentadoptedanewMEPSandlabellingregulationforairconditioners,fans,refrigerators,ricecookers,andLEDlamps.IndonesiaisalsodevelopingMEPSforseveralothertypesofappliances,whichareexpectedtobeenforcedin2022to2024.RecentlyMalaysiahascarriedoutthethirdphaseofitsSustainabilityAchievedviaEnergyEfficiency(SAVE3.0)programme,whichprovidesgrantstopurchaseappliancesrated4or5stars.Despitetheseadvances,considerablescopestillremainstoincreasethestringencyofMEPSintheASEANregion.Forexample,inSeptember2022theIEAnotedinAnEnergySectorRoadmaptoNetZeroEmissionsinIndonesiathat100%ofairconditionermodelsontheIndonesianmarketalreadycompliedwiththenewregulationwhenitcameintoforce–meaningithadnoeffectinremovinglow-efficiencyproducts–and16%ofunitswerealreadywithinthefive-starlabelthreshold.Thereisalsoasignificantregulationgapinindustrialelectricmotorsystems,withonlySingaporeandVietNamapplyinganyMEPSandonlyVietNamapplyingalabellingsystem.Thisisamissedopportunitytobenefitfromimprovedenergyefficiency.Itisestimatedthatimplementationofrobustapplianceefficiencystandards,energypricingreformsandbuildingenergycodesandstandardsinIndonesiaalonecanhelptoavoid225TWhofelectricitydemandgrowthto2050.Statusofselectedenergyefficiencypolicies,byASEANcountryIEA.CCBY4.0.Notes:MEPS–minimumenergyperformancestandards;CL–comparativelabel;BECs–BuildingEnergyCodes;BC/L-BuildingsCertification/LabellingEnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE125IEA.CCBY4.0.Countriesmakeprogressonefficiencyinbuildings,butbuildingcodescouldbestrengthenedsignificantlyAsimilarpictureemergeswhenconsideringenergyefficiencypolicyinbuildings.SeveralASEANcountrieshaverecentlyimplementedoraredevelopingbuildingcodes,standardsorotherschemes.Forexample,anewbuildingcodeadoptedinIndonesiain2021definesbuildings,technicalstandards,andcompliancemeasures,aswellasrequirementsforgreenbuildings.AseparateAssessmentofGreenBuildingPerformancesetsmandatorygreenbuildingenergyefficiencyrequirementsformanytypesoflargebuildingssuchasresidentialblocksofatleastfourstories.Cambodiaplanstoaccelerateenergyefficiencyimprovementsinpublicbuildingsaspartofawidernationalpolicyonenergyefficiency,scheduledforadoptionbytheendof2022.SingaporelaunchedaGreenBuildingMasterplanin2021tosupportmoreambitioussustainabilitystandardsforitsbuildings.ItalsoupdatedaGreenMarkcertificationandlabellingschemetoraiseenergyperformancestandards,andreleasedtheGreenMarkIncentiveSchemeforExistingBuildings2.0(GMIS-EB2.0)tolowertheupfrontcostofenergyefficiencyretrofitsforowners.However,acrosstheregionmostcodesandstandardsremainvoluntaryorapplicabletoonlyafewbuildingtypes,andinsomecountriescomplianceandenforcementofthosepoliciesthatdoexistispoor.Giventhatbuildingsexistingtodayareestimatedtomakeuphalfoftheresidentialbuildingstockin2050,itiscrucialthatcodesandstandardsareupdatedregularlywithincreasingstringency,andtargetnotonlynewconstructionbutalsoexistingbuildings.TheIEArecommendedpolicypackagesforbuildingsalsoincludegreencertificationandlabellingschemesfornewandexistingstructures,andfinancialincentivestiedtoenergyperformance.Strongdataframeworkstosupportmonitoring,verificationandenforcementareparticularlyimportant,andthereareseveralexamplesintheASEANregiontolearnfrom.InSingapore,mandatoryenergyperformancedatareportingfornon-residentialbuildingshasbeeninplacesince2012throughtheonlineBuildingEnergySubmissionSystem(BESS).InIndonesia,anonlinereportingsystemmanagedbytheMinistryofEnergyandMineralResourcesisinplaceforlargeenergyusers.TheIEAhasassistedIndonesiaindevelopinganenergyefficiencyinformationwebsite(SINERGI),whichfeaturesenergyreporting,anapplianceefficiencydatabase,energymanagementtips,aswellasinformationandcasestudiesforenergysavingincompanies.Thisyear,SINERGIreceivedanationalawardasoneoftheTopPublicSectorInnovationsforitscontributiontonationalenergyefficiencyandemissionsreductiontargets.EnergyEfficiency2022Chapter4.SpecialfocusonenergyefficiencyinASEANcountriesPAGE126IEA.CCBY4.0.Applyingan“energyefficiencyfirst”frameworkcanhelptoalignclimate,development,andenergysecuritygoalsUndercurrentpolicysettings,theASEANregionisexpectedtoseearapidriseinenergydemand,withannualaveragegrowthofmorethan3%from2021to2030.Inlinewitheconomicgrowth,regionalenergydemandisexpectedtotriplethatof2020levelsby2050withlargeincreasesinallfuelsandtechnologies,ledbyoil.However,measuresincludingenergyandmaterialefficiency,electrification,andbehaviourchange,canhelpavoidaroundone-quarteroftotalexpectedenergydemand.Thisamountsto3EJofenergydemandperyearby2030intheIEASDScomparedwiththeSTEPS.Themeasuresdiscussedinthischapterprovidearobustframeworkforreducingenergyconsumptionwhilepromotingeconomicdevelopmentandskills,aswellassocialandhealthbenefits.TakingapolicypackageapproachofregulationcombinedwithinformationandincentivesacrossallsectorscanhelpASEANmembersensurethattheirenergyefficiencypoliciesareeffectiveinmeetingtheneedsoftheirgrowingsocietieswhilealsoachievingclimategoals.Inordertoensurebetterimplementation,however,severalASEANcountrieswillrequirelarge-scaleinvestmentandsubstantialfinancinginordertodeliverontheirefficiencyandclimateobjectives.InvestmentinenergyefficiencyamongdevelopingeconomiesinSoutheastAsiahasstruggledwiththecontinuedimpactofthepandemic,withcontinueddisruptiontoconstructionactivitiesandlimitedpublicinvestmentprogrammes.FinancingfutureenergyinvestmentsinSoutheastAsiawillalsorequiremoreprivatecapital.Despiteincreasinginrecentyears,investinginenergyefficiencyandend-usetechnologiesaccountsforaroundone-fifthoftotalcleanenergyspendingandlessthan10%oftotalenergyinvestmentintheregion.Amajorchallengewillbetomeetitsgrowingdomesticenergyneedsbyscalingupcleaninvestmentsratherthanafocusoninvestmentsinfossilfuels.EnergyefficiencyinvestmentscombinedwithastrongpolicyandregulatoryframeworkcanhelptobridgethisgapandputtheASEANregiononapathtoenvironmentalandeconomicresiliency.EnergyEfficiency2022GeneralannexPAGE127IEA.CCBY4.0.GeneralannexAbbreviationsandacronymsAPSAnnouncedPledgesScenarioASEANAssociationofSoutheastAsianNationsCO2CarbonDioxideCOPCoefficientofPerformanceDSMDemand-sideManagementE4EnergyEfficiencyinEmergingEconomiesEaaSEnergy-as-a-ServiceEEOEnergyEfficiencyObligationEMDEEmergingMarketandDevelopingEconomiesESCOEnergyservicecompanyEVElectricVehicleGDPGrossdomesticproductIMFInternationalMonetaryFundIPCCIntergovernmentalPanelonClimateChangeMBIMarket-basedinstrumentMEPSMinimumenergyperformancestandardMSMEMicro,SmallandMedium-sizedEnterprisePHEVPlug-inHybridElectricVehicleRD&DResearch,developmentanddemonstrationSMESmallandmedium-sizedenterpriseSTEPSStatedPoliciesScenarioSUVSportsUtilityVehicleEnergyEfficiency2022GeneralannexPAGE128IEA.CCBY4.0.TCPTechnologyCollaborationProgrammeUNFCCCUnitedNationsFrameworkConventiononClimateChangeWEOWorldEnergyOutlookZEVZero-EmissionsVehicleUnitsbcmbillioncubicmetersBtuBritishthermalunitMMBtuMillionMetricBritishThermalunitEJExajouleGJGigajouleGtGigatonnekWKilowattMWMegawattGWGigawattKtoeThousandtonnesofoilequivalentMtMilliontonnesMtoeMilliontonnesofoilequivalentPJPetajouleInternationalEnergyAgency(IEA).ThisworkreflectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreflectthoseoftheIEA’sindividualMembercountriesorofanyparticularfunderorcollaborator.Theworkdoesnotconstituteprofessionaladviceonanyspecificissueorsituation.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthework’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thework.SubjecttotheIEA’sNoticeforCC-licencedContent,thisworkislicencedunderaCreativeCommonsAttribution4.0InternationalLicence.Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/contactTypesetinFrancebyIEA-November2022Coverdesign:IEAPhotocredits:©FabianVoswinkel

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