Global energy efficiency to rise 3% annually through 2030 – IRENA

Photo: IRENA

BAKU, Azerbaijan, October 17. Global energy efficiency is expected to improve by 3% annually through 2030 under current policies, according to the International Renewable Energy Agency (IRENA).

The forecast is outlined in the World Energy Transitions Outlook 2026, published on IRENA’s website.

The report notes that the average annual rate of improvement in global energy efficiency remained slightly below 2% over the past three years. Achieving the global target of doubling the rate of improvement by 2030 requires annual gains of around 4%.

Under IRENA’s Planned Energy Scenario (PES), energy efficiency is projected to improve by only around 3% annually between 2026 and 2030. By contrast, IRENA’s 1.5°C Scenario, which aims to limit global warming to 1.5 degrees Celsius, requires annual improvements of more than 4% over the remaining years to 2030 to make up for the shortfall in previous years.

The report identifies electrification as one of the key drivers of improved energy efficiency. Electric vehicles, heat pumps and electric industrial technologies can replace fuel-burning processes in which a significant share of energy is lost as heat.

“Developing renewable-based energy systems and expanding electrification can provide greater mobility, comfort and productivity while consuming less primary and final energy,” the report states.

A reduction in primary energy consumption under a scenario consistent with limiting global warming to 1.5°C does not necessarily mean lower economic activity or fewer energy services. To a large extent, it reflects improvements in the efficiency of the energy system.

However, electrification alone will not be sufficient to achieve the required targets. Other important measures include improving building energy efficiency, setting standards for household appliances, making industrial processes and transport systems more efficient, managing demand and changing consumption patterns.

The report warns that if energy efficiency improvements do not accelerate while electricity demand continues to grow, significantly more renewable generation capacity, infrastructure and investment will be needed to deliver the same level of energy services.

According to IRENA, improving energy efficiency, expanding power grids and ensuring flexibility in energy systems are becoming essential to the pace of the energy transition.

“These areas should not be viewed as secondary additions to renewable energy expansion, but as fundamental factors determining whether the transition can be implemented rapidly, reliably and at an affordable cost,” the report states.