The focus on the large build-out of renewables globally to curb emissions will be insufficient to meet the energy needs of the growing global population, unless the focus shifts urgently to better energy efficiency practices, says a whitepaper from energy solutions multinational Danfoss.

The whitepaper, titled ‘the neglected demand side of the green equation’, says that even though the use of renewables is growing, they are not even close to replacing fossil fuels. In 2021, the share of renewable technologies in the total global energy supply was 11.9%, a modest 0.2% increase from 2020. This slow growth was due to increasing global energy demand, the highest absolute increase in history as economies rebounded following Covid-19.

"Primarily of all the solutions to accelerate the green transition that exists in the world today, energy efficiency is the fastest, the easiest, and the most impactful. It can deliver nearly 40% of the total emission reductions needed to reach the net zero target," says Ravichandran Purushothaman, President- Danfoss India region. With the energy crisis looming high in many nations, rapid action on energy is both necessary and achievable for a sustainable transition to a carbon-neutral future, he says.

The whitepaper says given the increase in demand for green electricity in the years to come, there are challenges in moving towards renewables at the pace needed. Renewable energy build-out requires space, public support and raw materials. In the case of raw materials, there is increasing demand for resources like nickel, cobalt, copper, lithium and rare earth elements used to make renewable energy technologies.

The report cites that by 2030 it is projected that the world will be home to 750 million more people and in 2050 it is projected that the global population will have grown by nearly 2 billion. This population growth, with rising incomes pushing up demand for energy services, and many developing economies navigating an energy-intensive period of urbanization and industrialization, is going to be a challenge in reaching net zero goals. Already, hundreds of millions of people – the majority in Africa – are right now deprived of access to basic energy infrastructure and 13% of the world population remains without electricity for lighting, communications, education, refrigeration or keeping cool, says the report.

It notes that while higher energy consumption leads to higher economic growth, at the same time, higher levels of economic growth also foster higher energy consumption. Recent studies show that by 2100, global GDP could be 37% lower than it would be without the impacts of global warming. Without the global energy intensity improvements of the last two decades, emissions growth would have been almost double, or about 8 gigatonnes (Gt) per year higher in 2019.

The whitepaper says even in a scenario where we have electrified everything, we would still need energy efficiency because the production of renewable energy is fluctuating. When the wind blows and the sun shines, an electricity supply is plentiful and cheap. Generally, less energy is used at night when we are at rest, but in the morning and early evening demand spikes. As we continue to scale up renewables, the gap between supply and demand is increasing during peak hours. Digitally enabled energy efficiency devices and systems could help level out these peaks from the supply and demand side, as technologies are already available.

For households alone, enhanced efficiency and related avoided energy demand could help contribute to reducing global household energy bills by at least $650 billion a year by 2030 in the Net Zero Scenario. Higher investments to achieve these energy savings can support an extra 10 million jobs by 2030 in efficiency-related fields, such as new construction and building retrofits, and manufacturing and transport infrastructure. In the Net Zero Scenario, each unit of energy has to deliver more than it does today, and the final energy demand can be around 5% lower by 2030 but serving an economy 40% larger.

The whitepaper from the cooling solution major says active and intelligent energy efficiency measures in buildings, such as digitally controlled space heating or cooling, allow to shift demand and thereby shave the peaks. In the same vein, integrating sectors allows for the surplus heat generated in one sector (for example, the excess heat from a data centre) to be used in another sector (for example, the heating of local homes), thereby lowering the demand in peak periods.

Every dollar spent on energy efficiency can avoid spending more than 2 dollars on energy supply. Without early action on efficiency, the transition to net zero emissions will be more expensive and much more difficult to achieve, says the report, which says policymakers must urgently deploy solutions to reduce energy waste and electrify transport, industries, and buildings.

India's net zero targets

Net zero targets may fail unless energy efficiency improves: Danfoss