April 14. 2024. 7:49

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Energy efficiency should be at the top of every politician’s New Year’s resolution list

With Russian gas supplies gone, the energy deficit facing Europe is likely to get worse. Yet, focusing on increasing energy supply while neglecting the need to reduce demand is an asymmetrical strategy, writes Rasmus Abildgaard Kristensen.

Energy is the silent bedrock upon which our societies rest. In 2022, the strength of that bedrock was stress-tested. The economic fallout of conflict in Eastern Europe of energy has contributed to rising inflation and the looming recession we all face.

In response, many European nations have scrambled to build out more energy supply, even if it came at the cost of backsliding on their commitments to the 2015 Paris Agreement.

Yet an inconvenient truth remains; if we fail to use the energy we have more wisely, we will have no realistic chance of reducing the energy deficit that is destabilising the European economy.

That’s why we must encourage policymakers to set themselves an ambitious New Year’s resolution; use every policy lever available to ensure that every joule of energy goes as far as it can.

Only then can we start to rebuild the energy security we once took for granted, and lay the pathway for a fully-electrified, greener future.

The energy deficit facing Europe is likely to get worse. While consumers and businesses have already suffered at the sharp end of inflation and rising energy bills, they have been insulated by various factors that may not be repeated in 2023.

Firstly, in 2022, China’s appetite for gas imports was considerably lower due to slower economic growth, and therefore energy consumption, in the wake of Covid. An increasingly gas-hungry China could emerge in 2023, which would only intensify competition for gas cargo.

Equally, Europe has benefited from unusually moderate temperatures during the autumn months, meaning that both commercial and residential gas usage was significantly lower than during the same time period in 2021.

Finally, Russia’s cut of gas exports was acute but not total. Russia still supplied some 60 billion cubic metres to Europe over the course of the year. There is no guarantee that these exports will continue.

Policymakers may hope for the best. But if they fail to plan for the worst, the energy deficit will only widen. The most recent IEA whitepaper suggests that if Russian gas exports halt completely, the European gas market could face a deficit of 27 billion cubic metres.

The same report suggests that through the boosted energy efficiency measures, including efficient appliance sales, energy efficient savings in public and commercial buildings, and industrial energy efficient policy, Europe could save an estimated 8 billion cubic metres in 2023, approximately a third of our total predicted energy deficit.

Building out more renewable energy supply is essential if we are to ease the current energy squeeze, wean us off hydrocarbons, and lay the groundwork for a fully electrified economy.

Yet focusing on increasing energy supply while neglecting the need to reduce demand is an asymmetrical strategy. It is akin to filling a leaking glass by simply adding more water, without making any attempt to fix the hole.

Indeed, everywhere we look, we’re leaking energy. While policymakers can provide the framework, businesses and local authorities will be instrumental in finding innovative ways to reuse the energy we already have.

Take data centres and transmission centres, which together account for between 1 and 1.5% of global electricity usage. Yet still, some 90% of their energy is lost through waste heat. Similarly, supermarket fridges account for between 30% to 60% of supermarkets’ total energy usage. These, like data centres, create a vast amount of excess heat.

The list of low-hanging fruit is endless. Just as we recycle materials, we must start recycling the energy we use. Not only will this help us to keep our emissions down, it will help to buffer businesses, and consumers, from the rising energy costs felt across Europe and the world.

Many governments have sent signals of good intent. Germany, for example, has implemented mandatory heating system maintenance and optimisation, making inspections of gas-heated buildings essential every two years.

Similarly, companies are now obliged to implement efficiency measures with a payback time of less than three years if their usage is less than three years. The UK has similarly introduced a plan to cut energy usage by 15% by 2030.

However, before we shower these countries with praise, we must remember that both have also backslid on the Paris Agreement; Germany has fired up its previously dormant coal plants, and the UK has signed a new lease for a new coal plant in Cumbria.

The emission-saving power of energy efficiency will be lost if we pair them with further fossil fuel usage. Beyond the current energy squeeze, energy-efficient measures are essential for our collective Net-Zero ambitions; the IEA predicts that improving energy efficiency could reduce global annual emissions by 2030 so significantly that one-third of the reductions needed to deliver net zero by 2050 would be achieved.

The global economy used energy 2% more efficiently in 2022 than it did in 2021. However, to reach net zero and become truly energy independent, the global economy needs to use energy 4% more efficiently each year.

This will only be possible if we learn to reuse the vast amount of energy lost across our societies. By reusing our energy, and by electrifying everything across industry, transport and buildings, we can start to get more from every unit of energy we have.

That’s why energy efficiency must be at the very top of every policy makers’ New Year’s resolution list. By making our energy work harder for us, we can curb our emissions, protect our citizens and businesses, and make our economies more resilient to future energy shocks.

2023 must be the year we realise that the greenest, and cheapest energy is the energy we don’t use.