Energy efficiency programmes for buildings and industry

The buildings and industrial sectors consume more than 65% of the total global energy. Increasing the efficiency of that energy use, therefore, offers major gains. Globally, greater energy efficiency will reduce total greenhouse gas emissions and energy demand, making it easier to supply that energy from renewable sources. For individual building owners and companies, greater energy efficiency will reduce energy costs, improve comfort in buildings and boost competitiveness in industry.

Energy efficiency programmes can be mandated by standards or other regulations, such as building codes. In the Netherlands, for example, corporations that manage social housing must make periodic large-scale renovations, such as adding insulation, to guarantee certain levels of efficiency.

Alternatively, energy efficiency measures can be encouraged with market-based incentives, such as tax credits or interest-free loans. These incentives can help overcome one common barrier to energy efficiency upgrades: the real or perceived high upfront costs of efficiency measures such as additional insulation, improved windows or highly efficient heating systems. Increasing energy efficiency in industry is more challenging than in the buildings sector, where the same approaches can be used across most buildings. In contrast, the industrial sector often requires programmes that are tailor made for specific applications. Many of these may not be cost-effective. Efficiency gains in industry may thus require regulations, market-based incentives or requirements such as the European Union Emissions Trading System, or national initiatives like Netherland’s Environmental Management Act (Vreuls, 2017). One useful strategy for improving the overall efficiency is making better use of waste heat; at the same time, improving the energy efficiency of many processes can also reduce the amount of available waste heat.

Energy efficiency programmes can be enormously effective for buildings, reducing the energy demand for heating and cooling by up to 80% (Verbeke and Audenaert, 2018). The many benefits include lower energy costs, increased comfort and higher thermal inertia, which allows greater demand-side flexibility.

In industries, energy efficiency programmes via regulation or market mechanisms can accelerate transformation. However, unaligned regulations in international markets can hinder the competitiveness of industries that have to comply with relatively stringent requirements. Global consensus is essential to harmonise global markets.