The economic benefits of increasing energy productivity are clear, tangible and immediately effective

Denise Puca
Reading time: 5 minutes
13 September 2016

In May, The Climate Group in partnership with the Global Alliance for Energy Productivity, launched the EP100 campaign, a global initiative that supports influential businesses pledging to double their energy productivity. EP100 also aligns with the United Nations Sustainable Energy for All initiative and is an action of We Mean Business. Head of Energy Productivity Initiatives, Jenny Chu, explores the key aspects of the campaign and how increasing energy productivity can help businesses maximize the economic benefits that come with better energy use.

What is energy productivity and why does it matter?

The concept of energy productivity aligns energy efficiency more directly with business growth and development. Energy productivity builds on the progress we have made with energy efficiency, and focuses on maximizing the economic benefits of every unit of energy we consume.

Companies that implement plans to increase their energy productivity can enjoy multiple benefits: from reducing energy costs, enhancing profits and overall competitiveness to cutting their greenhouse gas (GHG) emissions, creating new jobs, and improving energy security.

Essentially, energy productivity is a new paradigm that allows businesses to capture the plethora of economic and environmental benefits that are achievable from optimizing energy use.

And as the International Energy Agency points out, global energy use is set to increase by one-third by 2040, so to meet the climate targets set in Paris, energy productivity will have to improve by 3% annually until 2050. It is therefore crucially important for the private sector to commit to improving their energy productivity.

How can companies double their energy productivity?

Businesses can improve their energy productivity by investing in energy efficient technologies and practices - such as LED lighting or more efficient heating, ventilation and air conditioning (HVAC) systems – and also managing their energy consumption in a smarter way and driving behavioral changes within their operations.

Companies that join the EP100 initiative will be part of a global platform that includes peer-to peer learning and sharing on the most cost-effective methods for improving energy productivity. Through a series of expert-led webinars and bi-annual roundtables, companies will also receive technical advice and guidance to overcome typical barriers and challenges to higher energy productivity.

What are the benefits of investing in energy productivity?

The economic benefits are clear: in the United States alone, doubling energy productivity by 2030 could save US$327 billion annually in energy costs and add 1.3 million jobs to the American economy, while carbon dioxide emissions would be cut by approximately 33%.

Furthermore, energy productivity will reduce the cost of related decarbonization efforts by up to US$2.8 trillion, as illustrated in a report from ClimateWorks and Fraunhofer ISI, keeping us on the right pathway to achieving the 2°C target detailed in the Paris Agreement.

The business case for energy productivity in the private sector is also undeniable. For Johnson Controls, one of the first companies to join EP100, energy productivity improvements have contributed to a 41% GHG emissions intensity reduction and over US$100 million in annual energy savings.

The Indian group Mahindra & Mahindra, which pledged to double energy productivity by 2030 on a baseline of 2009, stated that most of their energy efficiency projects to date have already achieved, on average, a remarkable 24% return on investment.

At this year’s Climate Week NYC, The Climate Group will host a joint event with EP100 and RE100 on September 20, which will show how energy productivity, when combined with renewables, can provide the least-cost decarbonization pathway for leading businesses and help keep the world well below 2°C.

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