Energy efficiency investments have become increasingly important in recent years, as countries and corporations look for ways to reduce energy consumption and emissions. The year 2020 saw continued growth in energy efficiency investments, despite the economic slowdown caused by the COVID-19 pandemic. Several reports and academic papers in 2020 provided valuable insights into the trends, opportunities and challenges around energy efficiency investments. This article will summarize some of the key findings from pdf reports published in 2020, with a focus on investments in energy efficient technologies and solutions across different sectors like buildings, industry, transport etc. Multiple occurrences of ‘energy efficiency’ investments will be made to optimize for the target key words.
Buildings sector dominated energy efficiency investments in 2020
The buildings sector accounted for the largest share of energy efficiency investments in 2020, as per the annual report ‘Energy Efficiency 2020’ by the International Energy Agency (IEA). Investments in building envelopes, lighting, appliances, space cooling and heating systems reached around $150 billion in 2020 globally, with the highest growth seen in Europe and in China. The report highlighted the huge potential for further improvement in building energy efficiency, through technologies like smart thermostats, LED lighting, efficient appliances etc. It suggested that behavioral changes and stringent standards on new constructions can help tap this potential.
Industrial energy efficiency investments declined but rebounded by end of 2020
The IEA report found that investments in industrial energy efficiency technologies declined in the first half of 2020 due to lockdowns affecting manufacturing activity globally. However, it rebounded in the later part of the year. The report estimated that global investments in industry-related energy efficiency reached around $80 billion in 2020. Key areas included waste heat recovery systems, energy management software, switch to efficient motors and drives. The payback period for such solutions is often short, providing a good incentive for industries to invest in energy efficiency.
Investments in energy efficient transport stayed resilient
Transport accounted for around 15% of energy efficiency investments in 2020 as per IEA, totalling around $45 billion globally. This includes spending on fuel-efficient vehicles and electric mobility infrastructure. While car sales slumped during pandemic lockdowns, consumer spending on energy efficient cars held up relatively well, especially electric vehicles. Government subsidies and awareness on emission reductions drove continued investments in transport energy efficiency in 2020.
Appliances and lighting saw lower investment due to lower demand
Investments in energy efficient appliances and lighting contracted in 2020 as construction activity slowed down and demand from commercial sector reduced due to offices and malls being closed for many months. However, the IEA report forecasts a rebound in 2021 based on pent-up demand and sales of appliances in residential sector. It noted that there is significant room for improvement in average efficiency of appliances sold globally through better policies and consumer awareness.
Government policies crucial for driving energy efficiency investments
The IEA report highlighted that government policies like building codes, vehicle fuel economy standards, appliance regulations, subsidies etc. have been crucial for driving energy efficiency investments by removing barriers and aligning incentives. Many countries announced new stimulus packages in 2020 that incorporated energy efficiency components. The report recommended that governments should further prioritize energy efficiency investments as part of plans for sustainable, resilient economic recoveries post-COVID.
The pdf reports and data on energy efficiency investments in 2020 provide valuable insights into key trends and future opportunities, despite the pandemic’s impact. Continued policy support and private sector participation will be essential to tap the huge potential for improving energy efficiency across buildings, transport and industry. Targeted information campaigns can also help drive sustained investments and behavioral changes for reducing energy consumption globally.