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
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.
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
SIDEBAR 7. COVID-19 and Energy Demand in Buildings, Industry and Transport
Throughout 2020, the COVID-19 pandemic affected most aspects of daily life across the globe, forcing individuals and communities to pivot quickly to new routines to prevent the spread of infection. Changes in energy use accompanied this major shift in societal behaviours.
Full lockdown measures reduced electricity demand 20% on average, depending on the country, with smaller effects for partial lockdowns. As a result, renewables claimed a greater share of global electricity generation (around 29% in 2020, up from 27% the previous year); this was in part because the output of renewables is often less directly influenced by electricity demand. (→ See Global Overview chapter.)
In buildings, remote working caused a shift in energy demand from commercial to residential buildings. In the first half of 2020, electricity use in residential buildings in some countries grew 20-30%, while it fell around 10% in commercial buildings. Depending on home size, heating or cooling needs, and the efficiency of computers and other information technology equipment and appliances used at home, a single day of teleworking can increase daily household energy consumption 7-23%, compared with a day working at the office. In some countries, consumers bought additional appliances (entertainment devices, teleworking equipment, etc.), which, coupled with the fact that people were spending more time at home, increased total appliance energy use. However, purchases of new, efficient appliances and replacement of old, inefficient models improve the energy intensity of the global appliances stock.
Most commercial buildings, even when offices remain unoccupied, continue to consume energy to maintain heating, ventilation and air conditioning systems and to power computing servers. The energy intensity of commercial buildings reportedly increased as the share of energy use from more energy-intensive essential sub-sectors grew. For example, food sales outlets, which largely continued to operate during the pandemic, were more than twice as energy intensive as the average office. Additionally, pre-COVID, around 30% of a building’s energy was dissipated in ventilation and exfiltration of air; as more people returned to workplaces later in 2020, demands for higher ventilation rates (for health reasons) increased the energy intensity of commercial buildings.
Restrictions on the ability of professional contractors to access residential properties delayed efficiency upgrades. At the start of the COVID crisis, global construction activity slowed an estimated 24%, along with a 12% decrease in on-site work at buildings, but as the sector rebounded the overall slowdown in construction activity fell to 10% by the end of 2020. In some markets, increased rates of do-it-yourself renovations may have led to improved technical efficiency. For example, sales of insulation in Australia were 20% to 40% higher in the first half of 2020 than a year earlier, and sales at US home improvement chains increased compared to 2019.
In industry, reduced production and consumer demand lowered energy demand across all manufacturing sectors. Energy-intensive sub-sectors (such as iron and steel, and cement) saw a lower decline in their activity than less energy-intensive industrial sub-sectors (such as textiles, machinery and equipment). For example, the share of automotive manufacturing in the industry sector decreased 30% in the first half of 2020 relative to the previous year, whereas basic metals manufacturing fell only 15%. As a result, upstream energy-intensive industries made up a larger share of industry activity, thus increasing energy and carbon intensity.
In transport, the major trends emerging from the crisis in 2020 were related to the impact of travel restrictions and remote working measures on both urban transport and the aviation sector. Long-distance passenger load factorsi in aviation fell dramatically, with the demand for commercial air travel dropping around 60% and rail demand declining 30%. This led to increased energy use per passenger and per kilometre travelled, despite the decline in overall energy use. A shift from aviation to rail can reduce energy intensity, whereas a shift from rail to road vehicles can increase it.
For those commuting by car, teleworking is estimated to reduce total energy consumption and emissions. However, for commuters who normally make only short trips by car (under 6 kilometres in the United States and under 3 kilometres in the European Union (EU), as well as commuters who mainly take public transport, teleworking is estimated to produce a small net increase in total energy demand and emissions. This is even before accounting for the fact that smaller numbers of bus and train passengers during 2020 increased the energy and carbon intensity of these modes of transport, per passenger-kilometre travelled. Due to social distancing efforts, people turned instead to private vehicles and active modes of transport, such as walking and cycling. Temporary bike lanes were installed in Paris (France) and Toronto (Canada), among many other cities, and some of these lanes have been converted into permanent infrastructure. Consequently, energy efficiency (per passenger-kilometre) of buses and trains decreased in tandem with lower passenger volumes.
Globally, as sales of new cars declined in 2020, the vehicle stock became relatively older and less efficient. However, this was partially offset by the fact that the relative share of electric vehicles (EVs) in new car sales rose, impacting the average efficiency of new road vehicles.
iPassenger load factors measure the capacity utilisation of an aircraft (i.e., how many of its seats are filled).i
Source: See endnote 9 for this chapter.
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