Market Digest

Global pry energy intensity may drop to 10-yr low

Staff Correspondent

4 December, 2020 12:00 AM printer

Global primary energy intensity –is expected to improve by less than 1 percent this year, the weakest rate since 2010, a recent research of the International Energy Agency revealed.

Global primary energy intensity is a key indicator of how efficiently the world’s economic activity uses energy .

This is well below the level of progress needed to achieve the world’s shared goals for addressing climate change, reducing air pollution and increasing access to energy.

The report published titled: "'Energy Efficiency 2020" on Thursday also pointed out that the disappointing trends are being exacerbated by a plunge in investments in energy-efficient buildings, equipment amid the pandemic.

According to the report, in industry and commercial buildings, lower energy prices have extended payback periods for key efficiency measures by as much as 40 percent.

Overall, the investment in energy efficiency worldwide is on course to fall by 9 percent in 2020. In this regard, Executive Director of the IEA Dr Fatih Birol said that energy efficiency is one of the mainstays of global efforts to reach energy and climate goals.

“Energy efficiency should be at the top of to-do lists for governments pursuing a sustainable recovery – it is a jobs machine, gets economic activity going, and saves                

consumers' money," said Birol.

"While our recent analysis shows encouraging momentum for renewables, I’m very concerned that improvements in global energy efficiency are now at their slowest rate in a decade," he added.

“For governments that are serious about boosting energy efficiency, the litmus test will be the amount of resources they devote to it in their economic recovery packages, where efficiency measures can help drive economic growth and job creation,” said Dr Fatih Birol.

The report also shared that improvements in energy efficiency can contribute around half of the reduction in energy-related greenhouse gas emissions required over the next two decades to put the world on a path to meeting international energy and climate goals.

However, short-term trends resulting from the Covid-19 crisis are slowing improvements in the energy intensity of the global economy, meaning that every unit of economic output uses more energy than it would do otherwise.

This is mainly because energy-intensive industries, such as metals manufacturing and chemicals, appear to have been less severely affected by the crisis than other, less intensive parts of the economy.

However, the IEA’s Sustainable Recovery Plan suggests further recovery efforts related to energy efficiency could create another 4 million jobs globally through enhanced public and private sector investment in buildings, transport and industry.