Energy efficiency: the hero of the energy transition

DNV’s Energy Transition Outlook (ETO) sees a world where energy demand will peak in 2033, due to energy efficiency gains that outpace economic and population growth.

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The three largest energy use sectors in society are all putting in place measures to reduce energy consumption:

1. Buildings. Greater deployment of energy efficiency measures in public, private sector and domestic buildings; electrification of cooking and heat/cooling; greater use of LEDs and smarter controls.
2. Industry. Electrification of heat and a more circular economy, aimed at eliminating waste.
3. Transport. Rapid Electric vehicle (EV) adoption will drive CO₂ and energy demand reduction and help the transition as EVs are 3 to 4 times more efficient than internal combustion engines.

DNV’s analysis of emissions to 2050 shows that energy efficiency helps reduce total energy demand by almost 300 EJ/year. But we need several enablers to achieve this, from policy makers who must strengthen energy efficiency support and mechanisms, through to digitalization and automation tools such as data visualization and AI, that can enable faster and larger energy and CO₂ reduction. We have seen, for example in the Netherlands, and to an extent in the UK that there are calls for all new buildings to discontinue use of natural gas as the heating source. Such tough but needed policies, if enacted quickly, provide clarity to the construction industry on which technologies to focus and drive significant CO₂ reduction. But the market alone cannot drive the changes required. With so many options, the supply chain can be reluctant to make big bets when policies may move against them.

In addition to technologies and incentives that either the market or governments deploy to reduce CO₂, the end user will significantly determine the impact, as demonstrated by our work in the UK with a project called Solent Achieving Value from Efficiency (SAVE). DNV worked with Scottish and Southern Electricity Networks (SSEN) to assess the potential for domestic customers to defer energy use at the peak times of 4pm to 8pm to help SSEN defer grid reinforcement. Funded by the government regulator for gas and electricity markets in Great Britain, Ofgem, the project ran from 2014 to 2019 and deployed a variety of measures across 4,000 households: (i) providing homeowners with information on energy reduction (ii) installing LED lighting (iii) paying rebates or incentives directly to the customer when they could keep their demand below a target; and (iv) a control group. The most consistent impact was seen in the LED group that saw on average 3% to 4% energy demand reduction, while for the other measures the energy demand reduction was variable and limited. So, the challenge is not only to choose the appropriate approaches, but also to convince the energy users, whether that is households, the public sector or industry, of the benefits that small steps can bring to them and to the environment at large.

To find out more about how DNV can help your business achieve its energy efficiency goals, come and talk to us on at stand D6 at EMEX, the energy management Exhibition at the ExCel in London from 26-27 November 2019.