United States : Global energy efficiency progress is accelerating, signalling a potential turning point after years of slow improvement

Government ambition for efficiency has grown in 2022 as fuel prices soared, with many major policies, spending commitments and public campaigns launched. Energy efficiency actions have accelerated globally in 2022 as governments and consumers have increasingly turned to efficiency measures as part of their responses to fuel supply disruptions and record-high energy prices, indicating a potential turning point after several years of slow progress.

Global investments in energy efficiency such as building renovations, public transport, and electric car infrastructure reached USD 560 billion in 2022, an increase of 16% in 2021, according to the IEAs latest market report, Energy Efficiency 2022.

Preliminary data indicate that in 2022 the global economy used energy 2% more efficiently than it did in 2021, a rate of the improvement almost four times that of the past two years, and almost double the rate of the past five years. If the current rate of progress can be built upon further in the coming years, then 2022 could mark a vital turning point for efficiency, which is one of the key areas for international efforts to reach net zero emissions by 2050.

The IEA analysis found that thanks to energy efficiency actions taken since 2000, total energy bills in IEA countries in 2022 are set to be USD 680 billion less than they would have been otherwise or around 15% of their total energy expenditure this year with past investments in building insulation and efficient cars saving many consumers thousands of dollars each year.

The global energy crisis sparked by Russias invasion of Ukraine has dramatically escalated concerns over energy security and the inflationary impact of higher energy prices on economies and peoples livelihoods around the world. The IEA report stresses that more efficient use of energy is the first and best response.

The oil shocks of the 1970s led to a massive push by governments on energy efficiency, resulting in substantial improvements in the energy efficiency of cars, appliances, and buildings, said IEA Executive Director Fatih Birol. Amid todays energy crisis, we are seeing signs that energy efficiency is once again being prioritized. Energy efficiency is essential for dealing with todays crisis, with its huge potential to help tackle the challenges of energy affordability, energy security, and climate change.

This years improvement comes after Covid-19 led to two of the worst years ever for global energy efficiency progress, with annual gains falling to around 0.5% in 2020 and 2021. Key factors included a higher share of energy-intensive industry in energy demand as other sectors contracted and a slowing pace of retrofits and upgrades in buildings and factories. Energy efficiency progress had already slowed before the onset of the pandemic, with the global rate of improvement falling from 2% in the first half of the last decade to 1.3% in the second half.