New white paper: The neglected demand side of the green equation

This is the first in a series of new whitepapers – Danfoss Impact – that we are writing to share our view on the potential of energy efficiency and electrification to transform our energy system.

By Danfoss | [email protected]

17 November 2022

In the dialogue around the energy crisis and the green transition, energy efficiency is often politically overlooked. One reason is that energy efficiency is not as tangible as renewable energy technology. Another reason is that we have fallen short of adequately explaining the enormous potential in energy efficiency and the critical role it must play to reach the full electrification of our society. In June this year, one of the most significant ministerial gatherings focusing solely on energy efficiency took place, when representatives from 27 governments attended the IEA’s Annual Global Conference on Energy Efficiency in Sønderborg, Denmark. This whitepaper builds on the strong statement agreed at the conference and the analysis “The value of urgent action on energy efficiency” published by the IEA at the conference.

We are writing these whitepapers to shine a light on evidence from credible sources on the role of efficiency in transforming our energy system. We do not intend to provide all the answers to what it takes to limit global warming to 1.5 degrees, but we want to stress the importance of curbing demand for energy as a basis for replacing fossil fuels with green energy. We also want to demonstrate that we already have the necessary technologies at our disposal.

Find more learnings about energy effiency on whyenergyeffiency.com

Key takeaways from the white paper

1. Energy demand will grow

Without urgent action, energy demand will grow significantly, getting us off track to meet global climate goals. Instead, according to IEA a collective push for energy efficiency can deliver one-third of the total emissions reductions needed to reach net zero[6].

2. Cooling: A global blind spot

Cooling is a global blind spot in climate change mitigation. As economies grow and adapt to a warmer climate, especially in the Global South, demand for cooling will make the second-largest contribution to the overall rise in global electricity demand over the coming decades [7].

3. Enabler of electrification

Energy efficiency is an enabler of electrification. To grow the role of electricity in the energy mix it is a fundamental, yet overlooked, fact that we need to reduce energy demand first. An early analysis found that for every dollar spent on energy efficiency, we can avoid spending more than 2 dollars on energy supply [8].

4. Technologies exist

Most of the global reductions in carbon emissions through 2030 needed for net zero come from technologies readily available today[9]. This paper presents concrete policy measures to increase energy efficiency across sectors.

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