IEA’s new data: global energy efficiency ratio continues to drop

However, good things never last. Though the reduction of energy intensity was close to 3% during the year of the Paris Climate Conference (2015), the improvement dropped consecutively in 2016 and 2017, hitting a record low of 1.2% last year, deviating even further from the 3% target! What is going on? IEA examines the reasons in their “Energy Efficiency 2019” report published in November.

China and the United States industries prosper, pushing up the demand of energy
Firstly, there is a drop in energy intensity of China and the United States due to the huge expansion of energy-intensive industries, which led to the spike in total energy demand, and IEA specially highlighted China’s steel industry and United States’ petrochemical industry.

Next, let’s look at the performance of China’s steel production. For the whole of 2018, China actually increased its global market share in steel production by more than 3%. The total energy consumption for production is an astonishing 4% of the world’s energy. Further analysis shows that more than 80% of domestic crude steel production uses less energy-efficient coal furnace for smelting. Besides, with the continued expansion of domestic steel demand last year, energy efficiency improvement continues to deteriorate inevitably.

Perhaps it was because of Trump’s support that United States’ petrochemical industry development was unrestrained. In the past two years, natural gas and crude oil extraction increased by 21% and 30% respectively, driving energy consumption in processes such as refining and processing. IEA report shows that despite the drop in energy intensity improvement for China, India, and the European Union, the ratios are still above 0% (indicating that there is still improvement). The United States, on the other hand, sees a drop from 2.5% to nearly -1%, indicating there is no energy efficiency improvement, but deterioration instead. This proves that petrochemical industry is highly energy-consuming. 

Energy efficiency improvement in various parts of the world drops, especially in the United States, which shows a decrease instead

Frequent extreme weather events increase the use of gas and electricity
Besides high energy consumption by the industry sector, the increasingly frequent global extreme weather events have become one of the culprits. This year, according to World Meteorological Organization (WMO), the world experienced the hottest period in the past 4 years, with the highest temperature recorded in 2018!

Let’s take a closer look at the climate information in various regions. Last year, Europe’s daily average temperature was 1.8°C higher than the past average temperature, hitting above 2°C between April and August; electricity consumption during this period increased by 20%. North America was exceptionally cold in April, October and November, with temperature lower than the past average temperature, and natural gas consumption increased by 14-20%.

Undoubtedly, the above data prove that extreme weather will directly increase the heating and cooling demand of buildings sector. In the future, with climate change and rapid global warming, the occurrence of extreme weather events will lead to huge electricity consumption, and the importance of energy-saving buildings is something that we cannot ignore.

Is digitalization energy-saving or energy-consuming? IEA is still unable to determine

Something refreshing is that IEA’s current report also touches on using digitalization to promote energy efficiency in three main sectors, namely buildings, industry, and transport. Take buildings sector for example, implementing technologies such as smart socket, thermostat, window control, light control, home energy management system and regional heating is likely to reduce 10% of buildings sector’s electricity demand by 2040. For industry sector, by adopting strategies such as AI computing and energy management, there is a possibility of 30% energy saving. For transport sector, technologies such as Internet of Vehicles and shared services may be able to help reduce 50% of carbon emission by 2050.

However, the report also highlights that data center and data transmission network in digitization are just as energy consuming, using approximately 460 TWh last year, which is 2% of the world’s electricity demand. Currently, IEA is still unable to determine whether a balance can be stricken between energy-saving and energy-consuming in digitization, and whether there will be rebound effect. However, it seems that in order to maximize the energy-saving effect of digitization, building green data centers and transmission is inevitable.

Electricity and natural gas consumption in various regions increases along with the occurrence of extreme weather events