Oct. 30, 2014: Global Energy Efficiency Market Worth $310 Billion Per Year
IEA Report Sees Energy Efficiency Financing Becoming Established Market Segment in Its Own Right
VERONA, Italy — The global energy efficiency market is worth at least $310 billion a year and growing, according to a new report from the International Energy Agency (IEA). The report also finds that energy efficiency finance is becoming an established market segment, with innovative new products and standards helping to overcome risks and bringing stability and confidence to the market.
“Energy efficiency is the invisible powerhouse in IEA countries and beyond, working behind the scenes to improve our energy security, lower our energy bills, and move us closer to reaching our climate goals,” said Maria van der Hoeven, IEA executive director, at the Verona Efficiency Summit as she launched the IEA’s Energy Efficiency Market Report 2014.
The annual report, now in its second year, shows that investments in energy efficiency are helping to improve energy productivity — the amount of energy needed to produce a unit of gross domestic product (GDP). Among 18 IEA countries evaluated in the report, total final energy consumption was down 5 percent between 2001 and 2011 primarily as a result of investments in energy efficiency. Cumulative avoided energy consumption over the decade from energy efficiency in IEA countries was 1,732 million tons of oil equivalent — larger than the energy demand of the United States and Germany combined in 2012.
This year’s report shows that energy efficiency investments over the past four decades have avoided more energy consumption than the total final consumption of the European Union in 2011. Efficiency investments and policies are reducing a continent’s worth of energy demand in a time when fast-developing economies are adding energy demand to the global energy system.
According to the IEA, some 40 percent of the global energy efficiency market is financed with debt and equity, meaning that the financial market for energy efficiency is in the range of $120 billion per year. The number of products and the volume of finance have greatly expanded in recent years, with green bonds, corporate green bonds, energy performance contracts, private commitments, carbon and climate finance, and multilateral development banks and bilateral banks all offering expanded sources of finance for energy efficiency improvements. Bilateral and multilateral lending alone amounted to more than $22 billion in 2012.
“Energy efficiency is moving from a niche interest to an established market segment with increasing interest from institutional lenders and investors,” said van der Hoeven. “As energy efficiency is essential to meeting our climate goals while supporting economic growth, the increasing use of finance is a welcome development. To fully expand this market, initiatives to continue to reduce barriers will need to strengthen.”
For an executive summary of Energy Efficiency Market Report 2014, click here.
Publication date: 10/27/2014