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IEA: Global Energy Efficiency Up Amid Oil Price Rout

Offshore oil

The world’s energy efficiency rose by 1.8 percent last year despite the oil price crash that saw crude trade at 60 percent lower levels than at its peak in 2014, the International Energy Agency said in a report. The figure represents the improvement in amount of energy used per unit of GDP, which means the global economy needed less energy to expand, the EIA explains in a press release.

What’s perhaps more interesting is the fact that much of this improvement came from China, rather than developed economies that put a much greater emphasis on saving energy. In China, energy intensity per unit of GDP improved by 5.6 percent. At the same time, primary energy demand in the country rose by just 0.9 percent in 2015, while GDP went up by 6.9 percent.

According to the IEA, without China’s achievement in energy efficiency, the global total would have been 1.4 percent, lower than the previous year’s improvement of 1.5 percent. What’s more, emerging economies as a whole are expected to continue driving the improvements in energy efficiency, especially “the large emerging economies,” according to IEA’s chief Fatih Birol.

In its Energy Efficiency Market Report 2016 IEA identified as crucial the introduction and strengthening of efficiency standards around the world. Thanks to car fuel economy standards alone, the world saved 2.3 million barrels of crude daily last year, which represents 2.5 percent of the global oil supply for the period.

This is an important outtake because the agency has estimated that in order for the Paris agreement targets for 2040 to be achieved, energy efficiency standards must lead to a 30-percent reduction in polluting emissions.

These standards currently cover about one third of energy use worldwide, which is up from 11 percent 16 years ago. Also, energy savings made last year as a result of these standards being introduced and strengthened over the 15-year period to 2015 totaled US$540 billion.

By Irina Slav for Oilprice.com

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