The current war in Ukraine has been ravaging for over a month now, and there are no signs of it stopping. There has been loss of human life, destruction of property and infrastructure, massive migration with over 4 million people fleeing their homes, and the list of consequences is just beginning.
On the global industry side, the fight between Russia and Ukraine has led to an energy crisis, which was already unfolding.
With global sanctions in place to limit, and ultimately eliminate, dependence on Russia for natural gas, prices for fossil fuels have skyrocketed and are being felt around the world by businesses and homeowners alike.
The concept of energy rationing is now top of mind as all stakeholders try to figure out how to keep costs low in a rapidly changing world. Germany and Austria are looking at taking emergency gas rationing measures while thousands of businesses evaluate what actions they can take to reduce their energy consumption.
What does this all have to do with energy efficiency?
Energy efficiency is simply the reduction of the consumption of energy. Reducing energy consumption means a reduction in energy demand. Translation? A smaller amount of energy is required to operate homes, businesses and countries. That means less money spent on energy and ultimately less dependence on the energy source because the entity is less reliant on it.
One outcome of the gas crisis is that many governments are trying to find new sources of energy to power up their countries and are discussing the possibility of new fossil fuel explorations to increase energy independence.
This is simply incompatible with the transition to net zero.
Investing in 2022 in new fossil fuel reserves is investing in the further destruction of the planet and guaranteeing that we will miss the Paris Agreement and see highly detrimental effects to the planet as outlined in multiple IPCC reports.
Through energy efficiency measures and a reduction in the total energy demand, governments will be able to avoid the development of new fossil fuel explorations and investments in the generation of high-emitting sources of energy, instead focusing on the transition to a renewable energy generation.
Lower energy demands can be more easily balanced on renewables, particularly if there is a diverse mix of renewable energy sources paired with appropriate storage solutions. That means heavy industry, which is far more dependent on fossil fuels, could be served through the existing fossil fuel infrastructure and other energy demands could be addressed through cleaner energy as we move to net zero.
Energy efficiency has already proven it can reduce energy demand and bring tangible benefits. According to the International Energy Agency (IEA), energy efficiency gains between 2000 and 2015 in Germany and the UK led to a reduction of gas demand by 11% and 29% respectively. Without these energy efficiency measures, gas consumption would have been 21% higher in Germany and 27% higher in the United Kingdom compared to the baseline in 2015. The savings from these two countries alone are equivalent to nearly a quarter of the European Union’s entire gas imports from Russia in 2015.
Clearly it’s possible, and energy efficiency needs to be considered as a route to addressing the gas crisis we face.
So, what does it look like to focus on energy efficiency?
It’s been said a thousand times, but energy efficiency is low hanging fruit and should be invested in as a starting point by all stakeholders.
Every single building owner and developer, for example, should implement the basic principles of energy efficiency in new and existing buildings. That means upgrading existing infrastructure to reduce energy demand and making sure every single new development is designed to be as efficient as possible.
Corporates should review their current impact and identify opportunities for improvement at a global level for energy efficiency improvements.
Government also needs to play its part. We saw many countries coming out with energy efficiency targets as part of the green recovery. In the European Union, out of a total of €472bn foreseen to be disbursed to 18 Members States for their green recovery, €39.9bn is currently allocated to buildings energy renovation. There is also the Renovation Wave and the Fit for 55 package, which includes energy efficiency legislation as part of the pathway to making the European Union climate neutral.
While there are many policies and proposals in place, we are yet to see the tangible infrastructure and framework in place to deliver them. Governments should take immediate steps to translate these legislations into clear roadmaps for industry to take action and access.
We need speed and agility, and we need both in full force.
Energy efficiency is the starting point of the solution, and it is not the be all end all. It won’t solve the current crisis but it can certainly contribute to the solution.
It is a standard statement in the industry that energy efficiency is a low hanging fruit. Let’s grab that fruit as soon as possible, so we can focus on the next level of decarbonisation, independence and prosperity.
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