December Newsletter - Curated by Boilersource

The world is wasting too much energy. Inefficient vehicles and ships burn more fuel than necessary, inefficient electric motors waste energy, excess heat generated from production is not being repurposed. And in buildings – both commercial and residential – vast amounts of energy is wasted every day because simple measures to monitor and control energy use are not in place.

​

That means no matter the deployment of new energy technologies, new forms of carbon storage or even carbon removal, the cheapest and most effective path to short term emissions reduction is energy efficiency.

​

Energy demand continue to grow, and as extreme weather events accelerate there is going to be an associated growth in energy demand, particularly around heating and cooling. In fact, it’s been projected that energy demand for space cooling alone could more than triple by 2050, consuming as much energy as China today. It is to be hoped that the large-scale deployment of renewable energy will help to decouple energy demand growth from emissions but, certainly in the short term, the signs are not good.

 

Not only has the war in Ukraine resulted in Russian-gas reliant states rush to find new sources of fossil gas, but the climate negotiations seem to be taking a step back on this issue. The outcome of COP27 saw a change in language allowing for low emission sources, which many are concerned opens the door to fossil gas use.

 

That being the case, it seems unlikely that the world will reduce the stranglehold of fossil fuels in the short term. It may be possible to change this over time but given the short window of opportunity that the world has to act, energy efficiency may be the only credible short-term path to emissions reduction.

 

Efficiency saves money and cuts emissions

Action is supported by both an economic and emissions argument. Energy efficiency has been known to be the cheapest, most effective form of emissions reduction for decades.

​

Yet even in the current energy and cost of living crisis, the rate of improvement in energy efficiency is slowing down. Between 2017 and 2020, energy intensity has improved on average by 1% per year but it's clear this needs to hit an annual rate of 4% to reach net zero. So why isn’t it happening?

 

Kim Fausing, chief executive of Danish multinational Danfoss argues that the problem lies in a lack of understanding, which leads to a lack of demand. Europe still has 500 million radiators without a thermostat – adding them could have an immediate impact. In Singapore, efficiencies resulted in reducing the energy bill for cooling by 40% while also cutting emissions equivalent to 10,000 cars. The real challenge is that efficiency is about a lot of little changes that add up to a major impact.

 

Fausing points out that we have the necessary technologies but there is a lack of an overall approach and co-ordination and says: “It’s hard because there is a limited degree of masterplan available. We have these goals, but we need an implementation plan with a clear path on how to get there.” At the same time however, it can be easier to understand and assess the impact of a wind turbine than it is to think about power balancing or the role of radiators.

​

Danfoss recently released a white paper which explores how energy efficiency should play a central role in all emissions reduction plans, The neglected demand side of the green equation. It argues that success means being smarter with how energy is being used and using green power in the electrification of everything across industry, transport, and buildings.

​

It’s a strong economic argument as well, increasingly important in a time of rampant energy price increases and a cost-of-living crisis. As the report points out, for every dollar spent on energy efficiency, around $2 in spend on energy supply is avoided. That has an impact on countries, on companies and on individuals.

​

What’s lacking is an orchestrated approach

Policies have been deployed to encourage the use of energy efficiency but for some reason it has never captured the public imagination the way it should. Today Germany is the only country that has an actual plan to reduce energy demand permanently.

 

It has set a target of reducing gas consumption by 20% through mandatory heating maintenance projects and there are rule in place for inspections to enforce such reductions. Large buildings are required to carry out hydronic balancing, which simply means optimizing the flow of water in district heating systems and directly cuts energy consumption.

​

Fausing warns that this is not a one quick fix issue, that it is a challenge that must be addressed at multiple scales at the same time. Governments need to set out policies and encourage investment, as we are beginning to see in India and Singapore. Cities need to get better at managing their budgets in coordinated and effective ways. Many cities around the world are responsible for district heating and cooling which, when managed correctly, can have an immediate impact. And, of course, there are companies. They have net zero targets; many are working on improving their emissions footprints – operating on the ground and responsible for change throughout their operations.

​

Understanding the impact of energy efficiency

The International Energy Agency (IEA) has said that about a third of all emissions reductions must come from efficiency, but also underscores that such reductions have multiple benefits. It has said that enhanced efficiency could help contribute to reducing global household energy bills by at least $650 billion a year by 2030 and support extra 10 million green jobs.

 

At the level of very simple interventions, adding thermostats to radiators could cut energy bills, and related emissions, by 30%. Even adding variable speed drives to motors or pumps in building systems could reduce energy use – something which Danfoss has done it in own operations effectively.

 

There are three priorities for governments, which also underpinned Danfoss’s own internal energy efficiency transformation. The first is to use more efficient technologies, while the second is to do more with the reuse of energy – why not use the waste heat from supermarkets, or even data centers, to heat nearby buildings? The third is electrification and the shift to renewable energy, as well as increasing efficiency in power transmission, which is about integration and how to improve system performance.

 

Fausing said that the assumption is that implementing energy efficiency projects is complicated and expensive. On the Danfoss projects over 200 projects were implemented all of which had a payback period of three years. He says: “The financial levers should be strong together with doing the right thing. What’s being forgotten is that it’s just really, good business.”

 

There are many simple and economic solutions. Effective hydronic balancing in heating and cooling systems (optimizing water in the system) can save up to 10% in energy with a payback of one year. Estimates on the potential for heat recovery have said up to 78% of heat demand could be covered by reused energy from cooling processes. In fact, Danfoss's own data center provides heat for 700 homes. But widespread implementation of simple solutions across multiple scale requires coordinated intervention.

 

This has been described as a “seat belt” moment for governments and climate

change. Seat belts were optional in cars for many years, but it wasn’t until

governments around the world mandated the wearing of them as law that things

changed, and lives were able to be saved in car accidents.

 

The Danfoss paper suggests actions that governments could take to improve the

situation but ultimately it is pointing out that we no longer have the luxury of time.

The impacts of climate change are affecting people today, it is showing its impacts

all around the world. Now is the time for governments to step up, act and enshrine

minimum energy efficiency requirements into law.