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Energy Efficiency

Updated: May 6, 2022

The efficient use of energy, sometimes simply called energy efficiency, is the objective of reducing the amount of energy needed to provide the same products or services, with the aim of also reducing carbon and equivalent emissions into the atmosphere.

Energy efficiency improvements are generally achieved by adopting a more efficient technology or production process or by applying generally accepted methods to reduce energy losses.

For example, insulating a building allows it to consume less heating and cooling energy to achieve and maintain thermal comfort. Installing LED lamps or natural windows and skylights reduces the amount of energy needed to achieve the same level of lighting compared to using traditional incandescent lamps.

There are numerous motivations to increase energy efficiency levels. Decreasing energy usage reduces energy costs. Reducing energy use is also seen as a solution to the problem of minimizing greenhouse gas emissions. According to the International Energy Agency, improved energy efficiency in buildings, industrial processes and transport could reduce the world's energy needs by 2050 by a third and help control global emissions of gases into the atmosphere. Another key solution is to remove government-led energy subsidies that promote high energy consumption and inefficient energy use in more than half of the world's countries.

Energy efficiency and renewable energies are considered the twin pillars of sustainable energy policy and are high priorities in the sustainable energy hierarchy. In many countries, energy efficiency is also seen as a benefit to national security, because it can be used to reduce the level of energy imports from foreign countries and can decrease the rate of depletion of domestic energy resources.

Measures of Energy Efficiency

The equipment in our home, office, our car, the lighting on our streets and even the plants that produce and distribute our energy, whether it be electricity, natural gas or another, somehow consume a source of energy.

Energy-efficient buildings, industrial processes and transportation could reduce the world's projected energy needs by 2050 by a third, so controlling global greenhouse gas emissions is also essential, according to the International Energy Agency.

The adoption of energy-efficient solutions or measures is necessary, for example, in buildings to install thermal insulation in order to consume less energy for heating and cooling, maintaining a comfortable temperature, replacing old incandescent lamps with energy-saving lamps, using appliances developed with reference to better efficiency, eg inverter refrigerators, energy savers. Wireless sensor networks are often used to visualize energy usage at each point to improve efficiency, as in the example of Japan.

As examples of energy saving measures that contribute to greater energy efficiency we have:

  • Adjustment of the heat generators' burning parameters

  • Thermal insulation of hot surfaces

  • Optimization of equipment operating conditions

  • Elimination of hot fluid leaks

  • Use of residual fuels or heat sources

  • Correct sizing of energy installations

  • Elimination of compressed air leaks

  • Recovery of thermal energy in air compressors

  • Replacement of conventional motors by high-efficiency motors

  • Installation of VEVs (Electronic Variable Speed Drives)

  • Change of tariff option

  • Load shedding

  • Power factor compensation

  • Lighting optimization and control

  • Better use of natural lighting conditions

  • Implementation of energy management systems

  • Installation of cogeneration systems


From an energy consumer's point of view, the primary motivation for energy efficiency is often simply to save money by reducing the cost of purchasing energy. Furthermore, from an energy policy point of view, there is a long trend towards the wider recognition of energy efficiency as the "first fuel", that being the ability to substitute or avoid the consumption of real fuels. In fact, the International Energy Agency calculated that the application of energy efficiency measures in the years 1974-2010 managed to avoid more energy consumption in its member states than the consumption of any specific fuel, including oil, coal and natural gas.

In addition, it has long been recognized that energy efficiency brings other additional benefits to reducing energy consumption. Some estimates of the value of these other benefits, often called multiple benefits, co-benefits, ancillary benefits, or non-energy benefits, place their added value even higher than that of direct energy benefits. These multiple benefits of energy efficiency include factors such as reducing the impact of climate change, reducing air pollution and improving health, improving indoor conditions, improving energy security and reducing price risk for energy consumers.

Methods have been developed to calculate the monetary value of these multiple benefits, including, for example, the experiment-of-choice method for improvements that have a subjective component (such as aesthetics or comfort) and the Tuominen-Seppänen method for price risk reduction. When included in the analysis, the economic benefit of energy efficiency investments can be significantly greater than simply the value of energy saved.

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