Energy Efficiency: What the IEA calls “the first fuel” Workshop Session: Knowledge Mobilization Thursday May 14, 11: :30 am Four Seasons Hotel, Vancouver, Strathcona Room Patricia Lightburn (former IEA Analyst)

From Hidden Fuel to First Fuel

First Fuel Savings from EE provided more avoided energy to “power” the economies of these 11 countries than the amount of TFC met by any other single energy supply source in 2011.

Total final consumption in 11 IEA countries is estimated to be 60% lower today because of energy efficiency improvements over the last four decades. EE Impact Over Time

Regional Comparison The magnitude of avoided energy consumption in 11 IEA member countries in 2011 was nearly the size of TFC in the world’s two largest economies, the United States and China.

Energy Intensity vs Energy Efficiency Energy intensity continues to decline around the world. – Energy intensity improvements over the past four decades have almost doubled the average energy productivity of OECD member countries. Energy efficiency has been a consistent and important factor in improving energy intensity and in reducing total final energy consumption between 2001 and Understanding the extent to which changes are related to energy efficiency improvements and underlying market activity, as distinct from other macroeconomic, demographic and structural factors, is a key issue from an energy policy perspective.

Decomposition Analysis Between 2001 and 2007, the efficiency effect alone would have reduced actual energy use by 10% between 2001 and 2007.

Residential Sector Energy efficiency has had the greatest impact in the residential sector, where TFC among the countries analysed is down by 5% from 2001 levels, driven by efficiency improvements.

Value of EE Fuel From the decomposition analysis, the value of energy efficiency based on avoided energy expenditure can be estimated using annual energy price and expenditure data. Case study: Australia – Cumulative savings from year-on-year efficiency improvements reached over AUD 30 billion between 2001 and – Avoided energy expenditure in industry and services were in excess of AUD 2 billion annually between 2006 and – Savings from energy efficiency were on average 3% of total annual energy expenditure in Australia.

Counting multiple benefits Contribution of EE as a fuel is significant – Value can be quantified in terms of the cost of the avoided energy supply Strongly dependent on local supply mix Multiple benefits of EE can significantly increase value of EE – energy security, economic development, social development, environmental sustainability and building wealth Some of these benefits can be quantified

Lessons for Local Government Energy efficiency a major player in the fuel supply mix Data collection is key – Justification for policies and incentives – Creating baselines, setting targets and measuring success towards meeting targets – Decomposition analysis to show contribution of EE relative to structure and activity effects – Quantifying the economic value of EE (value of avoided energy) How can energy demand be met though ‘supply’ of EE rather than fossil or other fuels?

Questions?