The International Energy Agency’s (IEA) eighth Annual Global Conference in June was an opportunity to gather with many other business leaders, policymakers and energy market experts in Versailles, France, and shine a spotlight on a topic that doesn’t receive as much attention as it deserves: the critical role energy efficiency plays in tackling the climate and energy crises.
Far too often decarbonisation efforts focus only on energy supply, for instance, by replacing gas-fired power stations with renewables like wind and solar. This, however, is only half of the story and according to the IEA’s net-zero scenario, the 33 per cent emissions reductions needed this decade must be achieved by consuming energy more efficiently.
Discussions at the event outlined how a fair energy transition, underpinned by energy efficiency and enabled by digitalisation and electrification, can drive accelerated decarbonisation while also reducing costs and increasing security of supply. This concluded with the ‘Versailles 10X10 Actions’, a set of priorities for this journey. These are outlined below, together with my observations about each one.
1. Measure and diagnose
Advanced energy management systems are widely available today and allow users to see and control the performance of every connected appliance within a home, office or industrial facility. This birds-eye view of energy consumption and efficiency provides the biggest potential to identify and eliminate waste.
Software systems built on artificial intelligence algorithms help optimise how and when to consume, produce and store energy. In the absence of extensive grid upgrades, digital-enabled energy management systems are key for resiliency and efficiency.
2. Awareness and knowledge
Many people want to take action, but they don’t always know where to start. Sharing practical applications and one-stop-shop advisories enable learning from best-in-class, real-life net-zero homes, buildings and industries.
To date, action and discussion has been focused on new constructions but the biggest impact will come from retrofitting existing buildings with more energy-efficient technology. It will be critical to upskill and reskill the workforce to install, operate and service these connected systems. For instance, electricians must become software and smart technology experts whilst plumbers need to understand electrical installations for heat pumps. Training people with the skills to drive the transition will also stimulate job creation and deliver wider social and economic benefits.
4. Design on total cost of ownership
Designers, architects and decision-makers need to shift from thinking about cost of construction towards the total cost of ownership for a project. Construction typically represents around 20 per cent of total cost, meaning much more thought needs to be given to operating and maintaining buildings, as this offers significant opportunities for efficiency.
5. Financing gap
Investment in energy efficiency has a very short, but recurring, payback, meaning continued savings well beyond return on investment and, ultimately, removed costs with green capital expenditures effectively saving brown operating expenditures. Financing models needs to be optimised to recognise and support this.
6. Government as role model
The United Nations Environment Program estimates that buildings produce around 40 per cent of global carbon emissions. The IEA has measured that energy efficiency, electrification and low-carbon energy have the potential to reduce more than 95 per cent of these emissions by 2050.
Governments must become role models and demonstrate leadership in this area. This starts by creating a decarbonisation roadmap, in which they audit each building’s energy performance and carbon impact to then develop a decarbonisation strategy.
One example of a successful civic energy efficiency project is Schneider Electric’s partnership with Madison County School District in Alabama, USA. Here, district-wide energy-efficient lighting, heating, ventilation and air conditioning is decreasing energy costs by 40 per cent. Over two decades, the district will save $40 million.
There was a large consensus at the conference that incentives are more effective than coercion. However, when coercion is needed, it must be regulated and there must be a horizon that allows people to review, plan and adapt for their transition.
8. Reinforce the grid
The current seven-year wait times to get new renewable infrastructure physically connected to the grid are not acceptable; we must accelerate the process and make transmission lines available much faster.
9. Scale up existing technology
When it comes to tackling climate change, there has been a widespread tendency to revert to big ideas that are years away. However, reliable, efficient and inexpensive solutions already exist, so we must focus on adopting existing technology faster and at greater scale.
10. Build the new net zero
We need to aim for net-zero construction that leverages existing technology.
The commitment to action has never been stronger and the time to act is now. We must enforce measures and execute the technologies for energy efficiency to make improvements materialise and help tackle the energy and climate crises for good.
Olivier Blum is executive vice president of energy management at Schneider Electric
This article was originally published in the Autumn 2023 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription