The need to address climate change and the expected surge in energy demand from the developing world have moved energy efficiency to the top of the agenda for government and business, according to a new comprehensive report by IHS Cambridge Energy Research Associates and the World Economic Forum. The report was released Mar. 11 during CERAWeek in Houston.
The report, Energy Vision 2010: Towards a More Energy Efficient World, says that energy efficiency represents a critically important energy source. Of all options available to meet growing demand, efficiency can quickly contribute the most energy supply while reducing costs and greenhouse gas emissions and increasing energy security, the report finds.
Contributors to the report include US Secretary of Energy Steven Chu, Japan's Minister of Economy, Trade, and Industry Masayuki Naoshima, ExxonMobil Corp. Chairman and Chief Executive Officer Rex Tillerson, Dow Chemical Co. Chairmand and Chief Executive Officer Andrew Liveris, and Alliance to Save Energy Pres. Kateri Callahan.
The report finds that, despite its crucial role in the world's energy strategies, energy efficiency is often misunderstood and is in need of a rebranding to match up with the reality of its potential.
"Efficiency is often incorrectly associated with sacrifice," said IHS CERA Chairman Daniel Yergin. "Energy efficiency really means getting more of the things we want while using less energy by improving the productivity of energy use. Efficiency means that consumers use less energy while preserving their lifestyles or even enhancing them."
The efficiency gap is the difference between available cost-effective efficiency options and those that are actually implemented. Closing the gap requires an understanding of how consumer and businesses make decisions about energy efficiency.
Consumer behavior is also crucial to understanding the efficiency gap, the report points out.
"Consumers do not always have the information that they need to make informed decisions about investment grade efficiency opportunities," said Roberto Bocca, senior director and head of energy at WEF. "Consumer inertia—the preference for the status quo and familiar technologies—can also tilt consumers against energy efficient choices," he said.
Innovation will also continue to play a key role in energy efficiency. The report cites the ongoing revolution in lighting technology—from incandescent to compact fluorescent bulbs to LEDs—as one clear example. Although breakthrough technologies capture the most attention, continuous improvement to existing technologies also plays a substantial role, the report says.
The report concludes that knowledge about the nature of investment grade energy efficiency, consumer behavior and technological innovation allows companies and policymakers to create the distinctive infrastructure that is essential to reaching energy efficiency goals.
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