The Energy Equation Can Be Solved

The world has a difficult energy equation to solve. On one hand, the development of new economies will lead to an increase of 35% in the energy demand in the next two decades. On another, CO2 emissions need to be cut by 35% in the same time period in order to limit CO2 concentration in the atmosphere to 450 ppm. A complete turnaround is required to solve the energy equation. Mature economies need to transition to greener and more efficient energy-consuming profiles, while new economies would grow their share of energy in the overall mix in an environmental friendly way.

This change is possible.

First, the potential for end use energy saving is massive. However, it requires the deployment of new technologies and changes to current energy consumption patterns. Up to 21% of the total primary energy, or 2700 Mtoe, could be saved.

Second, the volume of waste that our way of life generates is spectacular. Electricity generation in particular wastes a massive amount of primary resources. The pervasive deployment of efficient renewable electricity production, as a substitute to conventional fuels, could lead to up to 3600 Mtoe of primary energy saved, or 29% of the total primary energy consumed.

Finally, the emergence of competitive renewable energy sources of electricity and heat could lead to widespread fuel switching, with renewable energy substituting conventional fuels. The part of traditional transportation attributed to short-distance travel would be replaced by electricity-based transportation as a complement to extended smart mobility policies. Heating for buildings would be supplied by renewable energy sources. Also, a significant share of heat energy would be supplied by biomass in the industry sector. These substitutions alone could save up to 2600 Mtoe of primary energy, or a fifth of the total primary energy consumed.

Overall, the theoretical potential of primary energy savings is 8900 Mtoe. Of course, fuel switching strategies partially overlap with the energy efficiency measures which would reduce the demand on fossil fuels in end-use sectors. Nevertheless, the potential for reducing fossil fuels’ energy consumption is considerable.

The graph below is a representation of energy consumption in 2012 and its forecast evolution in the “New Policy” scenario (© OECD/IEA, WEO 2012). It also shows the overall savings that could be made from improved end-user efficiency, using renewable energies for electricity production and fuel switching. Clearly the main regions to focus on are:

  • - North America and Europe: these two regions present tremendous potential of energy savings,
  • - China and Asia Pacific: numerous energy efficiency opportunities already exist in these geographies (in particular, for electricity generation in China) and energy use there is expected to increase drastically in the next 20 years,
  • - India: energy consumption is projected to double in the coming two decades. While the savings potential in the country is low in absolute value, it could actually almost offset completely the energy increase (Fig. 5.20).

The energy equation can be solved provided energy consumption drops by 2400 Mtoe in the next 20 years, assuming the International Energy Agency’s

Solving the energy equation

Fig. 5.20 Solving the energy equation (© OECD/IEA, Buildings 2013; © OECD/IEA, Efficient Buildings 2013; © OECD/IEA, Energy Efficiency 2013; © OECD/IEA, Explore 2014; © OECD/IEA, Motors 2011; © OECD/IEA, Solar 2014; © OECD/IEA, Statistics 2015; © OECD/IEA, Technology Industry 2009; © OECD/IEA, Transport 2009; © OECD/IEA, WEO 2012)

“New Policy” scenario, in which primary energy demand worldwide grows 35% from a 2010 base of 13,000 Mtoe. This corresponds to a 27% realization of the overall potential.

Reducing end-use consumption is a major requirement. A large share of the potential savings from improved end-use efficiency would however have to be realized to reach the above savings target. Considering the inertia of all sectors, this seems out of reach. The substitution of conventional electricity production with renewable energy and, more generally, the substitution of other conventional fuels used for heating or transportation with renewable energy are thus mandatory to reach the desired level of energy savings.

For the world to achieve 27% of the ultimate potential for savings would constitute a paradigm change. The change is not out of reach. Building renovation and active controls, renewables integration and waste heat management in industrial processes, smarter transportation, new motorization technologies, and electricity production transition to renewables are all actions that have already been launched in most countries where the stakes are high. Now, these actions need to be accelerated in order to realize the objective by 2035. The clock is ticking.

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