IEA – Energy Efficiency, 2023

The global focus on energy efficiency is increasing as policymakers recognize its importance in enhancing energy security, affordability, and clean energy transitions. However, the rate of progress in energy intensity, which measures the energy efficiency of the global economy, is projected to slow down in 2023, falling to 1.3% from 2% last year. This decrease is primarily due to a 1.7% increase in energy demand this year, compared to 1.3% in the previous year. Despite this overall slowdown, some countries and regions have made exceptional gains in energy efficiency, driven by strong policy action, increased investments, and changes in consumer behavior. For example, the European Union, the United States, Korea, Türkiye, and the United Kingdom have registered significant improvements ranging from 4% to 14% in 2023. Global momentum is building to target a doubling in the rate of efficiency progress to 4% by 2023, which could lead to a one-third reduction in energy bills in advanced countries and contribute to 50% of CO2 reductions by 2030. This goal was endorsed by 46 governments participating in the IEA's Global Conference on Energy Efficiency. Efficiency policy actions have resulted in increased investment and deployment of more efficient technologies. Since the start of the energy crisis in 2022, countries representing 70% of global energy demand have introduced or strengthened efficiency policy packages. Annual energy efficiency investment has increased by 45% since 2020, with notable growth in electric vehicles and heat pumps. Despite these efforts, the impact of new policies and investments takes time to realize, and different countries and regions have varying levels of progress in energy intensity improvement. The European Union and the United States are expected to see high improvements of 5% and 4%, respectively, in 2023. The deployment of efficient technologies, such as heat pumps and electric vehicles, is curbing energy demand and contributing to the peaking of fossil fuels. For example, heat pump sales have increased by 75% in Germany, the Netherlands, and Sweden in the first half of 2023. These technologies not only rely on clean energy sources but also use less final energy compared to conventional cars or gas boilers. Overall, while global energy intensity progress is slowing down, there are pockets of significant improvement and increasing deployment of efficient technologies, indicating a shift towards a more energy-efficient and sustainable future.