Energy Demand Matters

Posted by Professor Nick Eyre on 25 July 2017

Energy Supply is Changing

The clean energy record book keeps getting rewritten. Globally, the costs for solar and wind are falling, so much that, in some places, they now produce electricity more cheaply than fossil fuels. Investment levels keep rising; more than half of power generation investment globally is in renewables and more than half of the resulting new capacity. This is illustrated in the chart below, from the International Renewable Energy Agency (IRENA).

Coal use is beginning to decline, especially in the UK where we have recently had days without coal-fired power generation for the first time since the 19th century.

But Energy Demand Matters too

Despite the good news, a rapid transition to a low carbon energy system remains challenging. Complete decarbonisation involves replacing fossil fuel use in transport and heating, not just electricity. Demand for energy services in developing countries will, rightly, continue to rise. And everywhere there is a political imperative to prioritise energy security and affordability. The decarbonisation challenges for investment, implementation and governance are huge.

In this context, improving efficiency and reducing demand still play a major role. The diagram from the Intergovernmental Panel on Climate Change (IPCC) shows that, in the decade 2000-2010, improved energy productivity was the only driver of carbon emissions reduction. All the other drivers - population, income and fuel mix - increased emissions (see IPCC chart below).

Going Further

International analyses by the IPCC and the International Energy Agency (IEA), and studies for countries as diverse as China and the USA, show that a 50% reduction in demand below business as usual levels by mid-century forms part of sensible decarbonisation strategies. There is no reason to think that Europe is any different. We will need to move beyond the 'low hanging fruit' of low cost measures to more substantial changes across the economy.

Going Faster

And this needs to be done quickly. This is why the European Commission and Parliament are pressing for strong energy efficiency goals in 2030. In the UK, we have a reasonable track record - energy demand has fallen consistently since 2004. But recent years have seen a substantial decline in activity, particularly in the buildings sector as shown in the diagram (see EE chart below). So we need to think now about reinforcing policy.

Making Demand More Flexible

In a world of variable and inflexible supply, demand will need to be more flexible. So the future "demand agenda" will be about more than efficiency and conservation. It will include where, when and what type of energy is used, as well as how much. And energy users will be the key actors in flexible demand, distributed storage and fuel switching. So, as we move to a low carbon system, there are more issues relating to energy demand that need to be addressed and more urgently.

Consulting the Community

We need to understand how all this can be done. So research into energy demand is central to the energy and climate challenge. Having recently been appointed as 'Energy Demand Research Champion' that's a message I intend to promote, within the research community and more widely. I'll also be developing a strategy and plans for a new End Use Energy Demand Centre. As a first step I am consulting on the themes that should be prioritised. Input from all sections of the community is welcome. The consultation survey is now live, and closes at the end of July.

Author

In the following table, contact information relevant to the page. The first column is for visual reference only. Data is in the right column.

Photo of Professor Nick Eyre
Name: Professor Nick Eyre
Job title: Professor
Organisation: University of Oxford

Nick Eyre is Professor of Energy and Climate Policy at the University of Oxford, and Energy Demand Research Champion for the Research Councils' Energy Programme.

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