By Giles Parkinson on 2 April 2014
In 2012, according to global investment bank HSBC, the global market for energy efficiency was around $US375 billion. That’s as much as was invested in fossil fuel electricity generation in that year, and 1.5 times the amount invested in renewable energy.
HSBC negawattsPut another way, according to the International Energy Agency, energy efficiency measures have, since 1974, saved around two-thirds of the energy that might otherwise have been consumed. This “decoupling” of energy use and GDP growth, says HSBC, means that each billion of global GDP required almost 40 per cent less energy in 2012 than it did in 2002.
This reduced consumption is what is known in the industry as “negawatts”. In all the scenarios painted by the IEA and others on tackling climate change, cutting pollution, decarbonising electricity and saving money – creating “negawatts” rather than adding “megawatts” – is absolutely key in extending the so-called “carbon budget”.
HSBC says there are four reasons why governments would want to encourage energy efficiency: energy security, industrial competitiveness and decarbonisation and pollution goals. It says energy efficiency is widely recognised as the most powerful tool to meet the challenges of energy demand and security. It can also help meet decarbonisation targets along with enhancing economic competitiveness
Others point out the obvious benefits to consumers.