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IEA: Treat energy efficiency as ‘world’s first fuel’

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Global energy saving investments - and their effects on energy demand - are now equal to the net contribution of other fuel sources, the International Energy Agency (IEA) said on 16 October, as it launched its inaugural Energy Efficiency Market Report.  

The IEA valued worldwide energy efficiency investments in 2011 at $300 billion (€221bn), a level on a par with global funding of renewable energy and fossil fuel power sources.

“Energy efficiency has been called a 'hidden fuel', yet it is hiding in plain sight,” said the IEA’s executive director Maria van der Hoeven, at a presentation for the paper in Korea.

“Indeed, the degree of global investment in energy efficiency and the resulting energy savings are so massive that they beg the following question: Is energy efficiency not just a hidden fuel but rather the world's first fuel?” she asked.

Between 2005 and 2010, 11 of the IEA member states made energy savings equal to $420 billion (€310bn), higher than from any other single fuel source. Without this, the countries would now be consuming about two-thirds more energy than at present.

Since 1974, energy savings in the 11 countries avoided the burning of 1.5 billion tones of oil equivalent, according to the IEA's Energy Efficiency Market Report 2013.

It finds that an absence of dynamic pricing in energy markets together with subsidies, high transaction costs, information failures and a lack of institutional capacity can sometimes impede efficiency improvements.

But it also cites a general growth of the efficiency market, due to effective government policies and high energy prices. Energy standards, labelling, access to assessments and financing, and obligations on suppliers have also proved “crucial”, the paper says.

While traditional appliance markets may seem static, energy efficient products and ICT equipment are growth areas, it says.

The IEA report: