Reflecting on the recently released International Energy Agency’s (IEA) Energy Efficiency 2023 report, Danfoss President and CEO Kim Fausing has called on governments to commit to doubling the rate of energy efficiency improvements by 2030 at COP28 to limit global warming to 1.5C.
The report, Danfoss highlighted, shows that not enough progress is being made on energy efficiency, and said that much stronger policy packages of information, regulations and incentives, and a tripling of global investment in energy efficiency and electrification, is vital to double annual improvements in energy efficiency – from 2% in 2022 to 4% per year on average between now and 2030.
Fausing called energy efficiency one of the most “crucial keys” to meeting climate goals, as the “single largest measure the world can take to reduce energy demand.”
Energy efficiency is, and always should be, the ‘first fuel’ for clean energy transitions, he said: “We need to see direct action on energy efficiency from leaders at COP28 if we are to limit global warming to 1.5C. We have virtually no chance of meeting our future energy needs, and certainly no chance of achieving net zero by 2050 if we don’t radically rethink energy efficiency as a key tool to decarbonize society.”
“As the IEA stated in their Energy Efficiency 2023 report, we need much stronger policy packages of information, regulations and incentives, and a tripling of global investment in energy efficiency and electrification, to double annual improvements in energy efficiency – from 2% in 2022 to 4% per year on average between now and 2030. The Sønderborg Action Plan, developed by the IEA is a great place to start,” added Fausing.
“By doubling the rate of energy efficiency improvements by 2030, we can save the equivalent of all global oil used in road transport today. That’s 40 million barrels of oil per day saved. We have the technology, and it’s the quickest and most cost-effective carbon mitigation option.”
Danfoss outlined that to move to an energy system based on renewable energy, everything across society, apart from those most hard-to-abate industries, must be electrified.
Further, it highlighted that transitioning from a fossil energy system to a fully electrified one can cut up to 40% of final energy consumption.
This, it said, means electrification is itself a form of energy efficiency, as most electric technologies have a lower rate of energy loss than a fossil-driven equivalent.
“An obvious example is electrical vehicles that convert 77% of the electrical energy to the wheels. In comparison, conventional gasoline vehicles convert about 12%-30% of the energy stored in gasoline to power the wheels.”
Meanwhile, using energy at the right time by utilising demand-side flexibility technology can save 40 million tons of CO2 emissions each year by 2030 in the EU and UK, it said.
“Seeing is believing, and, if climate ministers, energy ministers and finance ministers don’t know that we already have most of the solutions we need to double annual improvements in energy efficiency by 2030, I hereby invite them to visit our sites around the world to see the solutions in action,” said Fausing.
Peak energy consumption periods must also be reduced through demand-side flexibility, using energy at the right time when renewable energy is plentiful. Both consumers and industry should be incentivised with dynamic pricing to use electricity when there is an abundance of renewable energy in the grid, it said.
Danfoss also outlined that electrification’s potential goes beyond electric passenger vehicles, and includes many parts of industry, marine transportation, trucks, and construction machinery.
“To prepare for a future based on renewables we must plan to electrify all aspects of society apart from those very hard-to-abate sectors. Leaders must immediately work on making strategies and realistic timelines for electrification, identify obstacles to electrification, and address them,” it said.
Finally, Danfoss noted that to mediate the relationship between the supply and demand of renewable energy and to ensure energy security, the new smart grid must include load-shifting and peak-shaving technologies.
“Introduce demand-side flexibility guidelines in building and industry regulations guiding consumers to implement flexibility solutions faster. Give both consumers and producers access to consumption data, facilitating active participation and opportunities for system operators to further integrate demand-side flexibility solutions.”