Energy efficiency is critical for climate goals and global security

Get a weekly pulse on news and trends in impact investing with our free newsletter.

*I agree to receive marketing emails from ImpactAlpha, its affiliates, and accept our terms of use and privacy policy.
Guest Author

John Galyen

Europe must wean itself off of Russian oil and gas. Energy efficiency can go a long way towards alleviating the pain. 

Energy efficiency is the quickest and most affordable way to decarbonize our economy, working to reduce both direct emissions from fossil fuels and indirect emissions from electricity generation. In fact, energy efficiency is so essential it should be our first fuel. That’s why the European Parliament’s four largest political groups are proposing a 14.5% efficiency goal by 2030, up from the 9% discussed last year.

“Energy efficiency is a critical solution to so many of the world’s most urgent challenges – it can simultaneously make our energy supplies more affordable, more secure and more sustainable,” as Dr. Fatih Birol, Executive Director of the International Energy Agency (IEA), has said. “But inexplicably, government and business leaders are failing to sufficiently act on this.”

New research presented at the IEA’s 7th Annual Global Conference on Energy Efficiency in Sønderborg, Denmark in June revealed that doubling the global rate of energy intensity improvement to 4% a year could avoid 95 exajoules a year of final energy consumption by the end of this decade – the equivalent of the current annual energy use of China.

That level of savings would reduce global CO2 emissions by an additional 5 billion tons a year by 2030, about a third of the total emissions reduction efforts needed this decade to move the world onto a pathway to net zero emissions by mid-century, as laid out in the IEA’s Net Zero Roadmap published last year.

Sønderborg, in the south of Denmark, was chosen as the host city of this year’s conference because the municipality has made impressive headways in reducing emissions by implementing existing energy efficiency technologies. It can be seen as inspiration to other cities around the world looking for a roadmap for decarbonization.

Carbon neutrality and green jobs

Sønderborg aims to achieve carbon neutrality in its energy system by 2029. At the conference, Dr. Birol called Sønderborg “the global capital of energy efficiency.” This distinction came due to the municipality reaching the critical milestone of reducing CO2 by more than half (nearly 52%, or 362,208 tons of CO2) since 2007. In this time period, businesses have played a large part in lowering emissions, integrating climate objectives into their businesses and reducing business CO2 emissions by 60%.

The decarbonization target in Sønderborg has been crystallized in ProjectZero, a public-private partnership between the municipality, local businesses, and citizens to cut emissions via efficiency improvements and clean energy generation. ProjectZero was created to inspire and drive Sonderborg´s transition to a zero carbon community by 2029 by bringing together participation by all stakeholders to reach the ambitious goal: CO2-neutral growth and sustainable urban development.

The key insight from ProjectZERO is that energy efficiency action needs to happen at all levels of society, with cities, businesses, and local communities all playing an essential role. What we need are bold aspirations, a public-private master plan, and urgency – with early action on efficiency, the energy transition to net zero will be more achievable and less expensive.

Furthermore, these climate initiatives by Sønderborg have created new green jobs and contributed significantly to the long-term, sustainable employment sector. Training and education programs are vital to ensuring a suitably skilled green jobs workforce.

My company, Danfoss, a Danish provider of heating, cooling and power equipment, has a 250,000 square meter production, administration and testing facility near Sønderborg. These facilities provide a roadmap for the decarbonization of factory sites worldwide. Through a strong focus on energy efficiency, sector integration and green energy, we have reduced CO2 emissions at our headquarters by 95% between 2007 and 2021. 

This type of innovation is essential if we are to keep global warming below 1.5 degrees, especially as industry accounts for 39% of all global energy-related CO2 emissions.

Heat pumps and district heating

Buildings are responsible for 39% of global energy-related carbon emissions, so reducing CO2 emissions from housing is critical. Since 2007, CO2 emissions from housing have been reduced by 63% in Sønderborg, while emissions from space heating and domestic hot water have dropped by 73%.

The newly built area of Linde Haven in Sønderborg is one of many examples of how these reductions have been possible. Linde Haven was constructed to meet the highest sustainability and energy efficiency standards, designed with a series of passive energy efficiency measures, like controlled lighting and heating, that reduce energy needs.

Linde Haven is also at the forefront of low-temperature green district heating, a centralized heating system distributed via insulated pipes to 10,000 households and businesses in Sønderborg, or more than a third of the population. The heat is generated via a state-of-the-art geothermal facility, as well as massive absorption heat pumps and biomass burners, and operates at a low 57 degree temperature, compared to the typical supply temperature of 70 degrees Fahrenheit. 

District heating, along with heat recovery technologies that use excess heat from facilities such as data centers, ice rinks and supermarkets to heat homes and buildings, could be an efficient and sustainable solution. New York City has the largest U.S. district heating system. However, the cogeneration system, built in 1882 and operated by Con Edison, uses natural gas to create the steam. American universities like Stanford University and Carleton College are exploring how they can use geothermal district energy to eliminate their greenhouse gas emissions.

But we don’t need to wait to take action toward our carbon goals. There are proven yet under-deployed technologies that can help us save energy and reach our decarbonization goals. A pragmatic approach that the U.S. can take is to focus on scaling the use of electrically driven heat pumps in place of fossil-fuel-fired heating sources like boilers and furnaces, a technology that is currently being under-utilized. Planners, consulting engineers, policymakers and building owners that prioritize deploying heat pumps in existing buildings will significantly reduce operational emissions.

Speeding the transition

One of the ways that Sønderborg has made such rapid action possible is through government, business, and community buy-in around the importance of energy efficiency. More efficient cars, buildings, and industrial facilities require less energy to perform the same function.

The resulting cost savings are enough to increase commitment to energy efficiency further. A new analysis by the IEA found that, for households alone, enhanced efficiency and related avoided energy demand could help contribute to reducing global household energy bills by at least $650 billion a year by 2030. The quantity of natural gas the world would avoid using is equal to four times what Europe imported from Russia last year. New technologies on the horizon that make heat pumps more efficient and effective will help increase demand for electric heating.

The last decade has been warmer than any decade in the past 125,000 years. It will take many months, if not years, for new sources of clean energy to come online. We must still pursue that. In the meantime, energy efficiency can cut demand and help reduce dependence on Russian oil and gas – and speed the transition to a zero carbon future. After all, the greenest energy is the energy we don’t use.

John Galyen is President of Danfoss North America.