© OECD/IEA 2014© OECD/IEA 2014

Energy Efficiency Market Report

Capturing the Multiple Benefits of Energy Efficiency

Samuel Thomas Energy Efficiency and Environment Division, IEA

© OECD/IEA 2014

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Nuclear 7%

Renewables 30%

End-use fuel switching 9%

CCS 14%

End-use fuel and electricityefficiency 38%

Gt CO2

Power generation efficiency and fuel switching 2%

Portfolio of actions to reduce energy sector emissions

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End-use fuel and electricityefficiency 38%

Gt CO2

Portfolio of actions to reduce energy sector emissions

EE provides largest contribution to abatement

Power generation efficiency and fuel switching 2%

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Energy efficiency can help drive economic prosperity

Cumulative investments in energy efficiency of $12 trillion are more than offset by fuel savings & trigger economic growth of a cumulative $18 trillion

GDP in Efficient World Scenario versus New Policies Scenario, 2035

1%

2%

3%

4%

Japan & Korea OECD Europe United States China India

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A huge opportunity going unrealised

Two-thirds of the economic potential to improve energy efficiency remains untapped in the period to 2035 unless policy activity increases

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Impact of supply- and demand-side improvement on US import needs

Source: WEO 2012

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mb/d

Demand-side efficiency

Biofuels use in transport

Natural gas use in transport

Increased oil supply

Reductions due to:

2011 net oil import level

Projected net imports

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IEA fuel market reports

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Energy Efficiency Market Report

© OECD/IEA 2014

Global Energy Efficiency Market

IEA produced a series of new market estimates indicating the size of the market to be between USD 310 and 360 billion … and growing

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Monte Carlo: Distribution of energy efficiency market estimation

© OECD/IEA 2014

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Upstream oil and gas *

Coal, oil and gas electricity generation ***

Renewable electricity

generation **

Energy efficiency

R

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Estimated range of USD 147 to 300 billion

EE vs other supply (2011)

IEA EEMR 2013

(2012)Sources: BNEF, IEA

© OECD/IEA 2014

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1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Mtoe

SavingsOil

Gas

Coal

ElectricityOther

TFC

Energy efficiency: still the ‘first fuel’

Supplied (1336 Mtoe) more in 2011 to meet energy service demand than oil (1200 Mtoe), electricity (552 Mtoe), natural gas (509 Mtoe) in IEA-11*

*IEA-11: Australia, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Sweden, United Kingdom, United States

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Energy efficiency savings in IEA-11 countries rival TFC of major energy consuming countries and regions (e.g., EE improvements

over the last 4 decades saved more energy in 2011 than TFC in EU)

EE: an invisible power-house

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Energy efficiencysavings of 11 IEA

member countries

Asia (excludingChina)

China EU United States

Mto

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TFC

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How different factors are affecting energy demand over time

Energy efficiency has been the prime mover to reduce energy demand (TFC) – IEA-18*

85%

90%

95%

100%

105%

110%

115%

2001 2003 2005 2007 2009 2011

2001

= 1

Decomposition of Total Final Consumption by factor and isolated impact of each factor on energy demand (compared to 2001)

Economic andpopulation growth

Structural change

TFC

Changing efficiency

*IEA-18: Australia, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Sweden, United Kingdom, United States + Austria, Canada, Czech Republic, Korea, New Zealand, Spain, Switzerland.

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Vehicle fuel economy standards (VFE) affect 70% of global new vehicle fleet (50 million vehicles in 2011)

Transport: EE market driven by VFE standards

Source: Global fuel economy initiative

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Energy Performance Contracting market size in selected countries

ESCOs: a USD 30 billion market globally, and growing

Country Estimated market size (USD) Number of ESCOs or projects

China 12 billion .. United States 6.50 billion > 500 projects Germany 4.5 billion 500-550 ESCOs France 4.3 billion 350 ESCOs Italy 670 million 50-100 ESCOs United Kingdom 540 million 30-50 ESCOs Spain 450 million 20-60 ESCOs Canada 420 million .. Korea 330 million > 1 400 projects Denmark 195 million 15-20 ESCOs Croatia 140 million 10 ESCOs Russia 140 million 30-100 ESCOs Ukraine 140 million 30 ESCOs Japan 140 million 50 projects Total 30 Billion >1100 ESCOs

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Reaching out

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EE generates multiple benefits

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Energy Efficiency Warmth as Medicine

Carefully executed energy efficiency can deliver USD 99 billon in annual savings for Europe’s public health sector by 2020

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Boosting industrial productivity

Competitiveness Ability to enter new markets; reduced production costs etc.

Production Capacity utilisation; improved product quality etc.

Operations and maintenance

Improved operation; reduced need for maintenance etc.

Working environment Site environmental quality; worker health and safety etc.

Environment Air pollution; solid waste; wastewater; reduced input materials etc.

Generating strategic value for businesses

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Optimizing energy delivery

Benefits for utilities: in resource constrained operating context Benefits for consumers/indirect benefits for utilities: increased

affordability reduces customer default and associated costs

Supporting a changing business model

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Overarching macroeconomic impacts

Moving away from the traditional view that economic performance is always linked to increased energy consumption

– the reverse can also be true!

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Balancing public budgets

Investment effects Energy savings effects

Integrating multiple benefits into the calculation can more than double the return on public investment in energy efficiency

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THANK YOU

For more information contact: samuel.thomas@iea.org