PARIS — A new report from the International Energy Agency (IEA) said energy-efficiency markets around the world drew investments of up to $300 billion in 2011, on par with global investments in renewable energy or fossil-fuel power generation.

“Energy efficiency has been called a ‘hidden fuel’, yet it is hiding in plain sight,” said Maria van der Hoeven, IEA executive director, as she presented the report at the World Energy Congress 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?”

The “Energy Efficiency Market Report” says, from 2005-2010, efficiency measures saved the energy equivalent of $420 billion worth of oil in a group of 11 IEA member countries. If not for energy-efficiency measures in those countries, they would be consuming, and paying for, nearly two-thirds more energy than they currently use. In addition, in 2010, in those countries, the energy savings from implemented efficiency measures exceeded the output from any other single fuel source.

The report notes that two key factors have driven the recent growth of the energy-efficiency market: effective policies and the high price of energy. Energy standards, labeling, access to assessments and financing, and obligations on suppliers have proved crucial. And high oil prices in particular have encouraged savings. However, the 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.

Publication date: 1/27/2014

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