Energy efficiency puts money in your pocket

Published: G20 magazine

www-ET-infrastructure-Shanghai_Tower_738x415 Energy efficiency holds an untapped potential. It saves money, reduces air pollution and strengthens competitiveness. It even delivers short payback time on investments. To seize this opportunity requires an increased awareness of what can be achieved, when the right technologies are put into play.

- Thursday, 12 November 2015 By Niels B. Christiansen, President & CEO, Danfoss A/S

Across the world, we have the opportunity to earn attractive sums simply by making the most of the huge potential offered by improving energy efficiency. The global potential for energy efficiency is large, as two thirds of the potential to improve energy efficiency in the IEA’s New Policies Scenario is yet to be exploited1).

The low-hanging fruits are within our reach and increased awareness of all the solutions available together with inspiration from benchmark cases can help us identify ways to seize them.

Energy efficiency offers multiple benefits Energy efficiency is not only a matter of saving energy and reducing GHG emissions. According to IEA, energy efficiency is a mainstream tool for economic and social development across the world2).

Energy efficiency saves money, reduces air pollution, strengthens competitiveness and delivers short payback time on investments. And while doing so, it enables people across the world to achieve the comforts of an improved standard of living without increasing the amount of energy consumed to get it and without increasing their energy bills.

Making a difference in China
The cost savings alone make energy efficiency worthwhile; Grand farm, a successful enterprise in the Chinese meat industry, has installed a modern energy-efficient refrigeration system in their new processing plant and cold storage facilities. This has resulted in safe and healthy meat as well as saving 50% of the installation costs and 30% of the maintenance costs.

China has also recognized the advantages of district heating, which can cater for a broad range of energy sources. For example, by upgrading old systems with solutions that enable cities to use surplus heat from steelworks or factories, they can reduce coal consumption and CO2 emissions by 60-90% and significantly improve air quality.

The industrial sector in China holds great potential for energy savings; it accounts for over 60% of the country’s entire demand for electricity and 60-70% of this is used by electric motors. The benefit of applying variable speed drives to control motors in China would be so significant that the IEA has suggested they become mandatory3). Variable speed drives can cut 20-40% of energy consumption depending on the application.

The potential of buildings
Buildings hold a great potential and are a good target for political focus. They account for 40% of global CO2 emissions. And in Europe the total square meterage is expected to grow by over 5 billion m2 within the next 15 years. The demolition rates are low – only 0.1% and the renovation rate is s 1.4%4).

The old Ford residential complex in the German Nihl suburb of Cologne is an example of what can be achieved through renovation. New, so-called flat stations, distribute heating and hot water efficiently to 264 apartments while radiator thermostats accurately control the heat supplied. This has reduced the energy demand by an impressive 94% and significantly cut heating bills7.

New building codes have paved the way for one third of the savings in residential heating and further savings are expected from efficiency improvements via electric motor systems5). In the European Union, mandatory energy audits and eco-labels have helped raise awareness of this area and created more transparency.

There is an opportunity to do more
Knowing your energy performance makes good sense and can help households, companies, cities or even nations identify a potential that otherwise could have gone unnoticed. Increased awareness and comparing their level with what is best in class can help outline the route to achieving an outstanding energy performance.

With 30% of the global potential for improving the efficiency of energy being utilized in the New Policies Scenario by IEA, and 40% being exploited the industrial sector we have an opportunity to do more6).
Saving energy boosts profitability and this is a strong incentive for the industrial sector to put energy-efficient technologies into play. Government action can help guide household, construction and business investments in the same direction, so we can make the most of the global potential in these areas too.

Increased awareness drives progress
Increasing energy efficiency offers other roads to earnings; it reduces the demand for energy and with that the need for investing in expanding power capacity.
And the pay-off is also good of the additional investment it would take to move from the 6 degrees scenario to the 2 degrees scenario; data from IEA show that the amount of money saved on the cost of energy is three times larger than the amount spent on the transition to a low-carbon global energy system7).

We can drive progress forward by making the advantages of energy efficiency common knowledge and by showing what can be achieved with modern, proven technologies. That awareness makes it possible to identify all the pockets of opportunity and take action to seize them.

1) IEA World Energy Outlook, page 302.
2) The Journal of the International Energy Agency, Issue 7, 4th quarter 2014, page 8.
3) IEA World Energy Outlook Special Report in Energy and Climate, page 77-79.
4) IEA (2013a): Energy Policies of IEA Countries: Germany 2013 Review. Organization for Economic Co-operation and Development (OECD), page 74.
5) EEA 2015: European Environmental Agency (EEA): Progress on energy efficiency in Europe
6) IEA World Energy Outlook, page 302
7) Energy Technology Perspectives 2015, (IEA), page 16.


Engineering the world of Tomorrow

Danfoss engineers advanced technologies that enable us to build a better, smarter and more efficient tomorrow. In the world’s growing cities, we ensure the supply of fresh food and optimal comfort in our homes and offices, while meeting the need for energy efficient infrastructure, connected systems and integrated renewable energy. Our solutions are used in areas such as refrigeration, air conditioning, heating, motor control and mobile machinery. Our innovative engineering dates back to 1933 and today Danfoss holds market-leading positions, employing more than 26,000 and serving customers in more than 100 countries. We are privately held by the founding family.


Be social Take part

Want to socialize with us?

Get to know us and take part in the conversation