IEA says energy management implementation might save billions for industrial facilities

The International Energy Agency (IEA) said achieving the global target to double energy efficiency progress needs industrial energy management.

Nearly 200 countries at the COP28 climate change conference in 2023 have committed to collectively doubling the global average annual rate of energy efficiency improvements by 2030.

This decision comes as the world grapples with the pressing need to enhance energy efficiency in response to rising business costs and environmental concerns.

Energy efficiency progress, indicated by the primary energy intensity rate, saw a modest improvement of approximately 1% in 2024. This figure is notably lower than the improvements seen in the previous decade.

The industrial sector, responsible for 80% of the increase in final energy demand since 2019, has not shown significant advancements in energy intensity, with demand rising nearly 2% annually.

Industries’ energy consumption stands at around 170 exajoules, comprising approximately 39% of the total final energy use.

In 2022, industries in IEA countries spent more than $1.2tn on energy, marking an 80% surge from 2020.

Although reducing emissions in industry is challenging, it is also where investments can be highly effective. A mere 6% increase in total investment could deliver 20% of the energy intensity improvements by 2030.

Government-led energy management programmes have proven to address barriers to energy efficiency adoption, encouraging sustained savings.

Studies of more than 300 energy management case studies across 40 countries revealed an average 11% energy savings in the initial years, surpassing the industry’s average improvements.

Companies with energy management systems consistently uncover new energy efficiency opportunities, achieving continuous improvements even after 12 years of implementation.

Energy costs can constitute up to 50% of total production costs; in consequence, even minor efficiency improvements can notably impact profit margins.

Furthermore, energy management facilitates the digitalisation of production, enhancing process understanding and identifying improvement opportunities.

By 2035, AI-powered digitalisation could save energy equivalent to Mexico’s current total demand.

Energy management also yields benefits beyond efficiency, such as enhanced productivity, reduced environmental impact, and improved workplace safety.

Quantifying these non-energy benefits can increase the value of energy efficiency measures by 40% to 250%.

As countries electrify and decarbonise, the industry’s role in reducing energy demand and contributing to demand response services is becoming crucial.

Recognising the link between energy management and greenhouse gas (GHG) reductions, the International Organization for Standardization is developing the ISO 50100 standard, expected to be completed by 2026.

Governments can stimulate energy management through partnerships, long-term networks, benchmarking systems, and tailored support, especially for small and medium-sized enterprises, stated the agency.

To aid policymakers, the IEA has launched the Energy Efficiency Implementation Drive and the Energy Efficiency Progress Tracker, focusing on the industry sector and providing valuable data and analytics for policy development.