Home2025: Key trends

The way we use energy in our homes has dramatically changed since 1970. According to the IEA, of the building sector’s total CO2 emissions in 2010, 64% was accounted for by the residential subsector. Most striking is the over 3-fold increase between 1970 and 2010 in emissions from residential electricity use. And this growth is not set to stop.

The global middle class is forecast to more than double in size to reach 4.7 billion by 2030, bringing with it new purchasing power that goes beyond just the daily necessities, to expensive products such as smart televisions and cars.

With energy demand from buildings set to rise a total of 50% by 2050, action must be taken today to ensure we reduce our emissions – but in a way that is not at odds with the aspirations of citizens for better economic opportunities and quality of life. To achieve this, we must double energy productivity from 1.3% each year. The benefits from energy savings will be felt at the household level through lower fuel bills as well as across the economy.

Today we are poised for a shift in consumption which will impact how our homes are used and what drives emissions from homes as a result.

The number of households globally is projected to grow by 68% by 2050, almost twice the rate of population increase. OECD countries are expected to reach 608 million households by 2050, while in non-OECD countries household numbers are estimated to reach 2,551 million by 2050.

Single-family homes are currently the largest subsector by number of buildings, area per person, energy consumption and CO2 emissions. However, the size of homes varies dramatically between countries. The IEA estimates that when South Africa is excluded, annual residential electricity consumption by the 791 million people of sub-Saharan Africa (approximately 40 TWh) is the same as the electricity consumption of 19.5 million people living in New York State. Despite differences around the world, in general electricity is becoming a much more widely used source of power in homes, which together with commercial buildings account for 15% of global primary energy demand, but 50% of electricity demand – and this figure is set to rise by more than 25% by 2040.

Unfortunately carbon dense fossil fuels are still the primary sources used to generate electricity, comprising 75% of global generation. This is particularly problematic in non-OECD regions where the role of fossil fuels is enhanced – 85% of energy used to generate electricity comes from fossil fuels – and the rate of electricity uptake is increasingly rapid, a combination which results in large amounts of CO2 emissions.

  • Energy as a proxy for emissions in the home

To characterize the shift that must take place between now and 2025 – and even beyond – we must transfer the focus away from emissions (with the exception of food and agriculture – more on this in the food section) and onto the energy mix. This way we can gain more insight into the activities behind consumption and identify opportunities for change.

  • Different regions’ energy mixes require different actions

While global statistics are useful, the pathways to establishing low carbon homes are not the same for all countries. Final residential energy consumption differs widely between OECD and non-OECD countries, with OECD countries consuming mostly natural gas and electricity, while biofuels and waste constitute over 50% of energy use in non-OECD countries

While there is greater dependency on biofuels and fossil fuels in non-OECD countries because they are cheaper and more widely available, these energy sources mainly support basic activities such as cooking and heating. But despite broader electricity usage rapidly increasing, much is generated from fossil fuels and so contributes to large amounts of indirect GHG emissions.

Poor grid connectivity also means that large proportions of populations in non-OECD countries are often left with unreliable or no access to electricity. For this reason there is a huge opportunity for distributed energy resources, which reduce the need for costly infrastructure upgrades because they provide electricity more locally – and by using renewable energy sources, thus increase energy security.

Image from IEA

In OECD countries, renewable technology is widely available. But energy systems in these countries such as electricity grids and transportation infrastructure are long established, and have so far resisted radical transition.

Also natural gas, while having a lower carbon intensity than both oil and coal, is still a major player in household energy use and is predominantly used for heating and cooking. Market changes must be made so existing renewable technology can be more accessible and affordable to homeowners, in turn helping to drive change in the energy mix.

HOME 2025 explores ways in which businesses and governments can drive the innovation in policies and new business models that allow homes to become an active driver of low carbon transitions in the coming decade.

Home2025

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