RENEWABLE ENERGY AND CARBON INTENSITY

Renewable energy and energy efficiency have long been known to provide multiple benefits to society, such as lowering energy costs, improving air quality and public health, and boosting jobs and economic growth. Increasingly, renewables and efficiency are viewed as crucial for reducing carbon emissions. Energy production and use account for more than two-thirds of global greenhouse gas emissions, and together renewables and energy efficiency have made significant contributions to limiting the rise in carbon dioxide (CO2 ) emissions.1

This is reflected by the growing number of countries pledging to achieve net zero emissions and making emission reduction commitments in their Nationally Determined Contributions (NDCs) under the Paris Agreement – providing a key driver for greater implementation of both renewables and efficiency. As of the end of 2020, 190 parties to the Paris Agreement mentioned renewable energy in their NDCs, while 144 parties mentioned energy efficiency, and 142 mentioned both.2

Previous editions of the Renewables Global Status Report have tracked the combined benefit of renewables and energy efficiency through trends in the share of renewable energy and in energy intensity. Energy intensity can be assessed both as primary energy supply per unit of gross domestic product (GDP), and as final energy consumption in an end-use sector relative to a sector-specific metric (for example, energy use per square metre in buildings).3 Between 2015 and 2019, the annual rate of improvements in energy intensity slowed.4

image

However, energy intensity is an imperfect indicator for measuring the transition to more efficient and cleaner energy production and use. Trends in carbon intensityi – measured here as energy-based CO2 emissions per unit of GDP – help to better understand the full impact of both energy efficiency and renewables. Unlike overall emissions, which until 2015 increased in parallel with GDP growth, carbon intensity of GDP reflects the technical or structural improvements that occur in various sectors.5 As with changes in energy intensity, changes in carbon intensity result from a combination of factors beyond energy efficiency measures and the deployment of renewables alone, such as increased production from non-renewable energy sources and the growth of more carbon-intensive industries.6

Carbon intensity of GDP can be expressed as the product of the energy intensity of GDP and the carbon intensity of energy (that is, the CO2 emissions associated with energy production and use).7 Energy efficiency measures and the deployment of renewables can bring about improvements in both of these variables.

image

Renewable energy can improve the energy intensity of GDP by reducing the losses that occur in energy transformation and thus decreasing the amount of primary energy input that is needed to meet existing demand. Energy efficiency, in turn, can lower both the overall primary energy supply needed as well as the capacity and cost of the low-carbon energy systems needed to meet demand, thereby growing the share of renewables in the energy mix.8

Carbon intensity can be analysed both from the perspective of the energy sector as a whole, and with respect to the carbon intensity of specific end-use sectors, namely buildings, industry and transport. Some measures in these sectors – such as energy codes for buildings or the deployment of distributed renewables, heat pumps and other technologies for electrification – impact carbon intensity as they can have both an energy efficiency and a renewable energy component. Other energy efficiency measures can play a role in each sector, including digitalisation in the buildings and industry sectors, and fuels and vehicle emission standards in the transport sector. In 2020, the COVID-19 pandemic impacted the energy efficiency of all three end-use sectors.9 ( See Sidebar 7.)

Renewable energy and energy efficiency together help

lower carbon emissions

per unit of GDP.

Energy production is associated with various sources of CO2 emissions. These include, among others, oil and gas extraction and refining, fugitive emissions from mining and biofuels production, and the combustion of fossil fuels both for electricity production and for direct use in end-use sectors.10

Between 2013 and 2018, global energy-related CO2 emissions grew 1.9% (0.4% per year on average), to nearly 38 gigatonnes (Gt).11 The increase took place during a period of economic growth – global GDP grew 23% during the five-year period – but was slowed by improvements in the overall carbon intensity of GDP.12 In other words, there was an overall decoupling of global economic growth and CO2 emissions.13 These improvements in carbon intensity were due in part to increased renewable electricity production and, to a greater extent, to improved energy efficiency.14 ( See Figure 57.) This was despite a decline in energy efficiency improvements that began in 2015 and has been reinforced by the COVID-19 crisis and low energy prices.15

FIGURE 57.
Estimated Impact of Renewables and Energy Efficiency on Global Carbon Intensity, 2013-2018
image

Note: This figure estimates the additional primary energy input that would have been required in the absence of renewable electricity uptake since 2013, all else being equal. The estimation accounts for the difference in transformation losses between conventional and renewable electricity generation. However, it does not account for potential feedback loops on the energy demand itself due to energy prices, structural changes in economic activity or similar effects. The figure is not intended to provide results of a comprehensive energy model. Sources of renewable energy in this figure include those that emit no CO2 in production of electricity. Dollars are at constant purchasing power parities.

Source: See endnote 14 for this chapter.

image

iA “complete” accounting of the carbon intensity of GDP includes all greenhouse gas emissions from both energy and non-energy uses. However, considering that CO2 is the main greenhouse gas emitted by the energy sector, this chapter focuses on the carbon intensity of GDP due to CO2 emissions from energy use and refers to this concept as “carbon intensity of GDP”.i

DECARBONISATION OF END-USE SECTORS

Buildings

Industry

Transport