Energy efficiency markets around the world drew investment of as much as $300 billion in 2011, according to a recently unveiled report from the International Energy Agency called the “Energy Efficiency Market Report.” The report, joining the IEA market reports for oil, gas, coal, and renewables, describes for the first time the wide range of energy efficiency activities worldwide.
“Energy efficiency has been called a ‘hidden fuel,’ yet it is hiding in plain sight,” IEA Executive Director Maria van der Hoeven said as she presented the report at the World Energy Congress in South Korea. “Indeed, the degree of global investment in energy efficiency and the resulting energy savings are so massive that they beg the following question: Is energy efficiency not just a hidden fuel but rather the world's first fuel?”
The report highlights the enormous cumulative impact of energy efficiency. Efficiency measures saved an energy equivalent of $420 billion worth of oil in a group of 11 IEA member countries during 2005-12, according to the report. Without energy efficiency measures implemented in past years, about two-thirds more energy would be consumed by those 11 IEA member countries.
Effective policies and the high price of energy are the two key factors contributing to the recent growth of the energy efficiency market, the report says. Effective policies include energy standards, labeling, access to assessments and financing, and obligations on suppliers. And high oil prices have encouraged savings.
Factors including the absence of dynamic pricing in energy markets together with subsidies, high transaction costs, information failures, and a lack of institutional capacity can sometimes impede efficiency improvements.
In the report, energy efficient products and appliances and information communication technology equipment are emphasized as crucial growth areas for energy efficiency.
A selection of country case studies are also presented in the report, illustrating current energy efficiency markets in specific sectors and highlighting the relationship among investments, the energy prices and policies, and the types of return on investments achieved by consumers, businesses, and governments.
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