Energy efficiency

The fight against climate change and the subject of energy efficiency are interlinked. In 2015, the Paris Agreement set a binding target of keeping the global average temperature rise in this century as close as possible to 1.5 degrees Celsius. To address this climate emergency and reduce our carbon footprint, we need to significantly reduce greenhouse gas emissions.

Investments in energy efficiency have already made a significant impact on constraining the growth in greenhouse gas emissions. IEA highlights that doubling the rate of energy efficiency improvements seen in the last decade would, by 2030, slash global energy use by the same amount used in China every year, saving households $650bn [4].

The analysis published by IEA highlights the significant opportunities for fast energy efficiency gains in all sectors of the global economy. Many of these opportunities include technologies which are readily available. According to the IEA, around a third of the avoided energy demand by 2030 needs to come from the deployment of more technically efficient equipment, ranging from air conditioners to cars and trucks. Electrification also plays a significant role, providing 20% in energy savings, for example through replacing fossil fuel boilers with more efficient heat pumps, switching to electricity for low temperature heat in industry, and faster adoption of electric vehicles.

The United Nations Sustainable Development Goal 7 focuses on ensuring access to affordable, reliable, and modern energy. Today, 840 million people do not yet have access to electricity [5]. It is key that these ‘new’ energy consumers use it as efficiently as possible to prevent an increase in carbon emissions and ensure a transition to a climate neutral society that is just and socially balanced for all.

“If the world is to meet climate goals to limit global warming, energy efficiency measures must be prioritized. A third of the reduction needed in energy-related CO2 emissions this decade according to the IEA net zero scenario must come from improvements in energy efficiency. The good news is that the solutions are there to improve energy efficiency in all sectors. We don’t need to wait. We need action because the greenest energy is the energy we don’t use.” - Kim Fausing, Danfoss President and CEO

Cities offer unique opportunities to create efficient energy systems and use synergies between sectors. That is why, to meet their ambitious climate targets, cities need to transform their energy systems. And at the core of this transformation is the integration of different sectors into one smart and efficient energy system. This accelerates the need for innovation in urban efficiency and for developing sustainable low carbon and carbon neutral buildings.

Solutions are already available

The good news is that the technologies required to accelerate the decarbonization and develop low carbon cities already exist. And by fast-tracking the adoption of these innovative and proven solutions in cities, we can accelerate the low-carbon development and stay on course for net-zero in 2050.

So far, cities around the world have shown they are leading the way towards a more sustainable future by making ambitious commitments in line with Paris Agreement targets. City networks such as C40 Cities are doing a great job in sharing best practices amongst the most sustainable cities and taking the lead in ambitious climate action.

Buildings account for 28% of all global energy-related CO2 emissions [8]. Therefore, we need to ramp up improvements in the energy efficiency of buildings.  Smart buildings can play a significant role in smart and integrated energy systems.

In 2018, heat accounted for 50% of global final energy consumption [9]. In the US, 65% of all the energy produced is squandered in the form of waste heat [10]. There is a tremendous potential in reusing heat that would otherwise be wasted, also known as excess heat.

Supermarkets are big energy consumers due to the large cooling devices running 24/7. But supermarkets can also generate heat and power as a byproduct of the intensive cooling processes. Supermarkets can harvest the excess heat from the cooling devices that is disappearing into the air today and use it to heat their own store or to provide hot tap water for free to the surrounding areas.

Additionally, connected buildings, such as supermarkets, can offer excess capacity in an increasingly renewable-energy-based system, providing flexibility when the sun is not shining, or the wind is not blowing. Smart energy solutions – district energy and thermal energy storage – that combine cooling and heating are highly energy and resource efficient and an affordable solution.

Water is essential. Most importantly as a precondition to life, but also as a key to combating climate change. Word Economic Forums estimates that by 2040, there will be a 40% deficit in the supply of water available compared with global demand [15]. Currently, over 2 billion people live in water-stressed countries. This number is expected to be increased in some regions because of climate change and population growth [16]. Currently, the water sector is responsible for around 4% of global electricity consumption [17]. It takes tremendous amounts of energy to provide people with clean drinking water and sanitation – a declared human right. Today, cost-effective and energy efficient solutions can reduce energy consumption in the water sector massively, not least at wastewater treatments plants. Without action, global water-related energy consumption will increase by 50% by 2030 [18]. The world needs more water and fewer carbon emissions. Energy efficiency provides a path to break the curve.

There is a significant potential for energy savings in the water sector is all the economically available energy efficiency and energy recovery potentials are exploited – not least within the water supply and water treatment sector [19].

An obvious place to start is wastewater treatment plants that are present in most cities around the world. Water treatment plants are often operated by municipalities and eat up between 30-40% of municipal electricity bills [19]. For wastewater companies, the electricity bill constitutes the second largest operational cost behind labor [20].

Wastewater contains significant amounts embedded energy that can be harnessed to turn wastewater management energy neutral, thus producing the same amount of energy that it consumes – and with the right approach, even more. Consequently, wastewater treatment plants have the potential to be turned from energy consumers to energy producers.

There are a lot of ways to save energy in our homes. In fact, simple improvements can help reduce energy wastage, cut costs, and make our homes healthier, more comfortable, and more productive places to be in. Just by fixing the basics, we can on average achieve   great energy savings in our buildings – and on our bill – with short payback time.

Today, there are still over 500 million manual, uncontrolled valves installed in European buildings. By replacing these manual valves with thermostats radiator valves, households could on average save up to 18% on their energy bills and have an energy efficient home. For European citizens this represents savings of €12 billion annually and a CO₂ emissions reduction of about 24 million tons.

In addition, there are nearly 250 million radiators with thermostatic radiator valves older than 20 years that could be upgraded to digital valves which would lead to even higher energy and cost savings. Smart home technology that uses artificial intelligence and sensors, can help us predict our energy consumption – and lower the needed supply to meet the demand [23].

Most of the world’s building stock must be zero-carbon ready by 2050. Zero-carbon-ready buildings are highly energy efficient and supplied with energy directly from renewable sources or from energy sources with the potential to be fully decarbonized, such as district heating [24].

According to IEA’s Net Zero Emissions by 2050 Scenario, all new buildings must be zero-carbon ready by 2030. And 20% of all existing buildings must be retrofitted to be zero-carbon ready by 2030 [25].

The smart homes of the future are already here. The Leanheat software solution, for instance, uses artificial intelligence to control and monitor the temperature and humidity of every individual apartment in a residential building, saving time and money.

Over the next years, the world is expected to build 230 billion square meters in new construction – adding the equivalent of Paris to the planet every single week [26]. Construction machinery, such as excavators, is notorious for being inefficient, swallowing vast amounts of diesel, very little of which is converted to productive work. The construction industry accounted for a total of 20% of global-related carbon emissions in 2020 [27].

Today, the solutions are already there to drastically improve fuel efficiency in heavy construction machines, while more compact machines can be fully electrified. By combining electrification and energy efficient solutions in an excavator, just a quarter of the energy input is needed to shift the same amount of earth. Continued improvements in energy efficiency will pave the way for full electrification of the construction machinery.

Energy productivity is the key to decarbonizing our economy, and at Danfoss, we take the lead when it comes to engineering talk into action. Through joining the Climate Group´s EP100, Danfoss is committed to doubling its energy productivity before 2030. To achieve this target, measures have until now been implemented in our 27 largest sites – accounting for 85% of Danfoss’ total energy consumption.

By 2019, an energy productivity improvement of 80% since 2007 has been achieved. Within few years, it is expected to reach 100%, which means that half the energy will generate the same output. This not only saves energy, it also saves costs that stem from energy savings in heating, cooling, ventilation and lightning and investments in a global energy savings project. 

We are not only taking action within our production sites, but also by electrifying our company car fleet by latest 2030. It is essential to invest heavily in electrification that is then of course powered by renewable energy to achieve a world of no more than 1.5⁰ global warming. Therefore, we also joined the Climate Group’s EV100 and RE100 initiative and have become the first global technology company to join all three initiatives and thereby taking the lead among businesses towards a sustainable future.

We strongly believe that the private sector becomes stronger when we join forces with each other and with other actors such as governments and international organizations to deliver ambitious solutions based on technical know-how which not only solves one challenge, but creates value at a local, regional and global scale. So, the more widely available energy efficient, state-of-the-art equipment becomes in the markets we operate in, the better we serve the climate. In other words, delivering solutions to the world's challenges is also good business.

Two such partnerships are our work with Sustainable Energy for All and the UN Environment District Energy in Cities Initiative.The key focus is to meet SDG7´s call for doubling the global energy efficiency improvement rate by enhancing the global adoption of efficient district heating and cooling services and scale-up energy efficiency policy, action, and investment. Of course, we also closely follow, engage on and endorse regulatory developments such as the European Commission EU Green Deal, which will set Europe on course to be the first climate-neutral continent. We know that regulatory action at all level is a keydriver of ambition and are committed to playing our role in ensuring this happens. Today, we have the innovation and technologies required to help meet our climate targets and future-proof our planet. But with strong, proactive partnerships like these across business, government and civil society we can add – much-needed - speed and scale.