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From Hidden Fuel to Worlds First Fuel?

by Aaron Corvin
International Energy Agency, October 16, 2013

Inaugural publication pegs investment in 2011 at USD 300 billion, underscoring growing importance of energy efficiency

The scale of global investment in energy efficiency and its contribution to energy demand are as significant as those of other developed supply-side resources, the International Energy Agency (IEA) said today as it unveiled a new report that for the first time describes the wide range of energy efficiency activities worldwide in market terms.

The inaugural Energy Efficiency Market Report joins the IEA market reports for oil, gas, coal and renewable energy, highlighting the place of energy efficiency as a major fuel. The report notes that energy efficiency markets around the world drew investment of up to USD 300 billion in 2011, a level on par with global investments in renewable energy or fossil-fuel power generation.

"Energy efficiency has been called a 'hidden fuel, yet it is hiding in plain sight," IEA Executive Director Maria van der Hoeven said as she presented the report at the World Energy Congress in Korea. "Indeed, the degree of global investment in energy efficiency and the resulting energy savings are so massive that they beg the following question: Is energy efficiency not just a hidden fuel but rather the world's first fuel?"

The cumulative impact of energy efficiency is enormous. Consider the following facts:

The report notes that two key factors have driven the recent growth of the energy efficiency market: effective policies and the high price of energy. Energy standards, labelling, access to assessments and financing, and obligations on suppliers have proved crucial. And high oil prices in particular have encouraged savings. However, the absence of dynamic pricing in energy markets together with subsidies, high transaction costs, information failures and a lack of institutional capacity can sometimes impede efficiency improvements.

The report focuses in on a specific technology sector in which there is significant energy efficiency market activity: appliances and information communication technology (ICT) equipment. Here, while traditional appliance markets seem static, energy efficient products and ICT equipment are growth areas for energy efficiency, the report says.

Finally, the report presents a selection of country case studies that illustrate current energy efficiency markets in specific sectors and highlight the relationship among investments, the energy prices and policies that enable them, and, importantly, the types of return on investments achieved by consumers, businesses and governments. Prospects for key markets are outlined, but it is clear that targeted energy efficiency policies will continue to play a key role in developing and enabling markets for energy efficiency services and products.

This first Energy Efficiency Market Report is on sale at the IEA bookshop.

To read Executive Director Maria van der Hoeven's comments at the reports launch, please click here.

To see the slides from the report's launch, please click here.

Aaron Corvin
From Hidden Fuel to Worlds First Fuel?
International Energy Agency, October 16, 2013

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