The International Energy Agency (IEA) urges governments to keep energy efficiency top in their priority lists to pursue a sustainable recovery as it would get economic activities to continue, saves consumers money, modernizes vital infrastructure and lowers emissions.
The executive director of IEA Mr. Fatih Birol says that the agency is always open to innovative plans from governments to enhance spending on energy efficiency in response to the economic crisis, but the responses from the authorities are uneven and far from enough.
The coronavirus pandemic has collapsed the global progression towards energy efficiency to the slowest rate of the last ten years. The overall investments in this vertical have fallen down to 9 percent in 2020.
“Global primary energy intensity, a key indicator of how efficiently the world’s economic activity uses energy, is expected to improve by less than 1 percent this year, the weakest rate since 2010. 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,” IEA explained in a statement.
Due to the pandemic outbreak, investments in energy-efficient buildings, equipment and vehicles are estimated to decline as the global economy contracted. The new cars as well as the efficient homes and buildings market are also expected to fall, IEA stated.
“In industry and commercial buildings, lower energy prices have extended payback periods for key efficiency measures by as much as 40 percent, reducing their attractiveness compared with other investments,” the Paris-based agency stated in a report.
Technical efficiency improvements in some markets have also been slowed down. The smart meter installations were 80 percent to 90 percent lower at the height of lockdowns in India and the UK but had returned to 2019 levels by the third quarter of 2020, the agency added.
The prevailing situation brings economic uncertainty and it may pull back additional investment in the construction sector, with the future growth estimations of the energy-efficient material being 6 percent weaker than pre-pandemic projections.
The agency also added that the government stimulus packages that are targeted to shield the from effects of the pandemic and help economies rebuild, will highly influence future efficiency trends.
Across the globe, Europe accounts for 86 percent of public stimulus announcements for efficiency, with the remaining 14 percent split between the Asia-Pacific region and North America.
By the end of October IEA had tracked about $66 billion of funding for energy efficiency-related measures announced as part of government stimulus packages. From which $26 billion was allocated to the buildings sector and $20 billion to boost the shift to electric vehicles, including for new vehicle charging infrastructure.