A market report by the International Energy Agency (IEA) confirms the role of energy efficiency as the “first fuel,” with the global energy efficiency market currently worth US$310 billion or more.
Emphasizing the role of energy efficiency in climate change mitigation efforts, the report stresses that while it is becoming an established market segment, efforts to strengthen financing for energy efficiency should be strengthened.
The report also finds significant potential for energy efficiency in emerging economies, in particular in the transport sector.
8 October 2014: A market report by the International Energy Agency (IEA) confirms the role of energy efficiency as the “first fuel,” with the global energy efficiency market currently worth US$310 billion or more. Emphasizing the role of energy efficiency in climate change mitigation efforts, the report stresses that while it is becoming an established market segment, efforts to strengthen financing for energy efficiency should be strengthened. The report also finds significant potential for energy efficiency in emerging economies, in particular in the transport sector.
The report, titled ‘Energy Efficiency Market Report 2014,’ was launched on 8 October 2014, in Verona, Italy, and is part of the IEA’s medium-term reports series, which comprises five-year forecasts on market trends and developments on the primary energy sources for global markets and energy efficiency, published annually.
The report includes sections on: market trends and tracking energy efficiency progress; transport efficiency developments; and energy efficiency finance. In addition, the report presents country energy efficiency market profiles for ten developed and developing countries and the EU.
On market trends and progress, the report: calculates that energy efficiency improvements in 11 IEA member countries over the past 40 years contributed to the saving of 1,336 million tons of oil equivalent (Mtoe) in 2012, equal to more than the total final consumption of the EU; estimates the value of the global energy efficiency market in 2012 at US$310-360 billion; highlights energy efficiency as the key driver in lower total final consumption; and stresses that the current pace of energy efficiency improvements is not sufficient to stay below 2°C of global warming.
On transport, the IEA underscores the potential for energy efficiency in the sector, and notes that, since demand for energy is expected to stabilize in the Organisation for Economic Co-operation and Development (OECD) countries, new efficiency potential will lie in emerging economies. The Agency estimates global investments in efficient transit systems to total US$233 billion by 2020.
On finance, the report finds that the energy efficiency market is becoming an established financial market segment but requires increased levels of financing. The IEA estimates the current size of the financial market for energy efficiency at approximately US$120 billion per year. According to the Agency, the number of products and volume of finance have expanded greatly over the past years, but “to fully expand this market, initiatives to continue to reduce barriers will need to strengthen.”
In the IEA’s current 2°C scenario, energy efficiency accounts for 40% of emissions reductions. [IEA Press Release] [Publication: Energy Efficiency Market Report 2014] [IEA Energy Efficiency Market Report 2014 Factsheet] [IEA Medium-term Reports Webpage]