© OECD/IEA 2011
IEA Vision to Increase Energy
Efficiency:
Market Report 2015 and
Multiple Benefits
Samuel Thomas
Energy Efficiency Unit
Fifth Regional Energy Efficiency Dialogue
Lima, 28 October 2014
© OECD/IEA 2012
Energy efficiency can help drive
economic prosperity
Cumulative investments in energy efficiency of $12 trillion are more than offset
by fuel savings & trigger economic growth of a cumulative $18 trillion
GDP in Efficient World Scenario versus New Policies Scenario, 2035
1%
2%
3%
4%
Japan & Korea OECD Europe United States China India
© OECD/IEA 2014
20%
40%
60%
80%
100%
Industry Transport Power
generation
Buildings
Realised energy
efficiency potential
Unrealised energy
efficiency potential
Two-thirds of the economic potential to improve energy efficiency
remains untapped in the period to 2035
Energy efficiency potential used by sector in the WEO 2012 New Policies Scenario
A huge opportunity going unrealised
© OECD/IEA 2011
2018
2028
2014Energy
Efficiency 2014
2018
2028
Facing up to the Fuels Competition
EE keeps producing :
© OECD/IEA 2012
Impact of supply- and demand-side
improvements on US oil import needs
Source: WEO 2012
0
2
4
6
8
10
2011 2015 2020 2025 2030 2035
mb/
d
Demand-side efficiency
Biofuels use in transport
Natural gas use in transport
Increased oil supply
Reductions due to:
2011 net oil import level
Projected net imports
© OECD/IEA 2011
IEA fuel market reports
© OECD/IEA 2011
� Defining and ‘Sizing’ the market:
� Inputs
� Outputs
� Diffuse and Varied:
� Local specificities w/Common elements
� Prospects
� Data/methodological challenges
IEA’s Energy Efficiency Market Report
© OECD/IEA 2011
IEA’s Energy Efficiency Market Report
© OECD/IEA 2011
• Energy prices
• Resource management
• GHG emissions abatementInternational
• Macroeconomic effects
• Job creation
• Energy security
• Public budget impacts
National
• Increased asset values
• Energy provider and infrastructure benefits
• Industrial productivity and competitiveness Sectoral
• Health, wellbeing and social improvements
• Poverty alleviation: energy affordability & access
• Increased disposable incomeIndividual
More Public/Private Stakeholders
The Public
Building bridges . . .
© OECD/IEA 2011
Energy efficiency improvement
Energy provider benefits
Asset values
Disposable income
Poverty alleviation
Health & wellbeing
Energy savings
Climate change
mitigationEnergy prices
Resource management
Development
Energy security
Job creation
Macro impacts
Public budgets
Enterprise productivity
Sector-wide
International
National
Individual
The many benefits of EE
© OECD/IEA 2011
Country or Stakeholder A Cty/Stk B Ctry/Stk C Etc.
IndustrialCompetitiveness Co-Benefit
Fuel Imports Primary Co-Benefit
Poverty Alleviation and Development
Primary
GHG EmissionsPrimary Co-Benefit
Job Creation Co-Benefit Co-Benefit
Etc.
Benefits vs. Co-Benefits Multiple Benefits
‘Different strokes for different folks’
© OECD/IEA 2011
Multiple Benefits: a ‘work-stream’
� Raise Awareness
� Increase Analytical Substance
� Identify Methodological Tools
� Build Capacity
© OECD/IEA 2011
Launched
Sept 9 by
the IEA
Executive
Director at
the 2014
IEPPEC
Conference
in Berlin
© OECD/IEA 2011
© OECD/IEA 2014
Energy efficiency: still the ‘first fuel’
Supplied more in 2011 to meet energy
service demand than oil, electricity or
natural gas in IEA-11*
0
200
400
600
800
1 000
1 200
1 400
Oil Gas Coal Electricity Other Efficiency
savings
Mto
e
Total final consumption of fuels and energy savings from
energy efficiency in 11 IEA countries in 2011
TFC
*Australia, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Sweden, UK, USA
© OECD/IEA 2014
Energy efficiency savings in 11 IEA countries rival
TFC of major energy consuming countries and
regions. EE improvements over the last four
decades saved more energy in 2011 than TFC in
the European Union.
0
500
1 000
1 500
2 000
Energy efficiency
savings of 11 IEA
member countries
Asia (excluding
China)
China EU United States
Mto
e
TFC
Energy efficiency: still the ‘first fuel’
© OECD/IEA 2014
Energy efficiency savings since 2001 in
18 IEA countries
Since 2001 energy efficiency investments saved more
cumulative energy (1700 Mtoe) than the annual TFC of the
United States and Germany
2 400
2 500
2 600
2 700
2 800
2 900
3 000
3 100
2001 2003 2005 2007 2009 2011
Mto
e
TFC and hypothetical energy use without energy efficiency improvements since 2001
Actual energy use Hypothetical energy use without efficiency Cumulative savings
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2001 2003 2005 2007 2009 2011
Mto
e
© OECD/IEA 2014
How different factors are affecting
energy demand over time
Energy efficiency has been the prime mover to
reduce energy demand (TFC)
85%
90%
95%
100%
105%
110%
115%
2001 2003 2005 2007 2009 2011
2001
= 1
Decomposition of Total Final Consumption by factor and isolated
impact of each factor in on energy demand (compared to 2001)
Economic andpopulation growth
Structural change
TFC
Changing efficiency
© OECD/IEA 2014
Transport: EE market driven by VFE
standards
� Vehicle fuel economy standards (VFE) affect 70% of global
new vehicle fleet (50 million vehicles in 2011)
� Standards could achieve between USD 40 and 190 billion in
fuel savings by 2020 pending ambition and effectiveness
Source: Global fuel economy initiative
© OECD/IEA 2014
Transport: a shift in geography
All new transport demand estimated to come from non-OECD:
source for demand translates into EE market opportunity
Source: Energy Technology Perspectives, IEA
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
2000 2005 2010 2015 2020
Billion
pkm
Passenger
OECD Non-OECD World
0
5 000
10 000
15 000
20 000
25 000
30 000
2000 2005 2010 2015 2020
Billion
tkm
Freight
© OECD/IEA 2014
Energy efficiency finance
� Energy efficiency finance is expanding and innovating
� Third-party financing estimated in range of USD 120 billion
� Bilateral and multilateral development funding for energy
efficiency was over USD 22 billion in 2012
� Energy efficiency finance is moving from niche to established
financial market segment
� Energy efficiency market will grow with greater transparency
and standards for financial products
© OECD/IEA 2014
Country case studies
� 11 countries evaluated
� Highlighted sub-markets and innovative policies
harnessing market factors
©
Canada Italy
China Japan
EU Korea
India The Netherlands
Indonesia Thailand
Ireland
© OECD/IEA 2014
China: increasing investments in EE
from 11th to 12th Five-Year Plan
� 11th FYP: Invested USD 120 billion between 2006-2010 to achieve
between 238-287 Mtoe of energy savings
� 12th FYP: Target of USD 200-270 billion in efficiency investments
between 2011-15 to achieve 235-268 Mtoe
Energy savings Investment
Total(Mtoe)
Savings achieved by
energy efficiency (Mtoe)
Total (USD billion)
Public funds
Commercial funds
11th FYP actual 441 238-287 120 18-19% 81-82%
12th FYP needed 469 235-268 200-270 -
© OECD/IEA 2014
Conclusions
� Energy efficiency market a
significant component of the
global energy system
� Market is growing with drivers
strengthening
� Issues such as economic growth and climate
change to drive further attention
� Policies, standardization, information and
data, critical to achieve the opportunity
© OECD/IEA 2014
A huge opportunity going
unrealised Two-thirds of the economic potential to
improve energy efficiency
remains untapped in the period to 2035 unless
policy activity increases
© OECD/IEA 2014
Multiple benefits of energy
efficiency improvements
Energy efficiency is a means to enhance energy security,
support economic and social development, promote
environmental goals and increase prosperity.
© OECD/IEA 2014
Coverage
� Macroeconomic development
� Public budgets
� Health and wellbeing
� Industrial productivity
� Energy providers
� Companion Guide to the multiple benefits
approach – methodologies
© OECD/IEA 2014
Macroeconomic development
© OECD/IEA 2014
Balancing public budgets
Investment effects Energy savings effects
Integrating multiple benefits into the calculation more than
doubles the return on public investment in energy efficiency
© OECD/IEA 2014
Improving health & well-being
© OECD/IEA 2014
Industrial productivity and
competitiveness
Competitiveness Ability to enter new markets; reduced
production costs etc.
Production Capacity utilisation; improved product
quality etc.
Operations and
maintenance
Improved operation; reduced need for
maintenance etc.
Working environment Site environmental quality; worker health
and safety etc.
Environment Air pollution; solid waste; wastewater;
reduced input materials etc.
© OECD/IEA 2014
Expanding energy provider
business models
Transmission and distribution costs can be deferred or,
in 1 out of 3 of cases, completely avoided, by targeted energy
efficiency
© OECD/IEA 2014© OECD/IEA 2014
• Energy Security
• Environmental Protection
• Economic Growth
• Engagement Worldwide
