This overlooked solution can unlock abundant and affordable clean energy

The world faces an energy ‘trilemma.’ Governments and businesses aim to deliver affordable energy, guarantee security of supply and transition to a sustainable energy system. But these goals can be in tension with each other.

For example, we are not on track to add sources of clean energy fast enough to meet the energy demands of today, much less the future. By 2050, global energy demand is expected to increase by up to 33%. Even if we triple renewable energy generation, that will not provide enough sustainable and affordable energy to meet this demand, risking higher reliance on fossil fuels and a longer and more expensive transition.

The good news is that there is a lever that can help us achieve all three goals. And it’s simple: use energy more efficiently.

PwC has partnered with the World Economic Forum’s International Business Council (IBC) to show how we can reduce global energy consumption by 31% without reducing economic output, saving over $2 trillion in annual energy costs. Improvements in energy efficiency on this scale would significantly reduce carbon emissions from energy and put the world comfortably ahead of the energy usage targets set out in the Paris Agreement.

There is more good news. For businesses, increasing energy efficiency is doable, affordable and a sound investment. There is no need to wait for technological breakthroughs. Businesses in all markets and sectors can use existing, affordable technologies right now to improve their energy efficiency. For example, simply by turning off power to unused offices, PwC UK has reduced its carbon footprint from building energy use by 77%.

We estimate that energy efficiency interventions made now would be fully paid back within a decade, if adequate energy efficiency interventions are made by 2030. Concerted global action on energy efficiency would unlock growth and productivity while getting the world back on track to meet the targets set by the Paris Agreement.

The right policy environment can be hugely effective in encouraging and enabling energy efficiency. For example, in Belgium, tax incentives for electric company cars have helped make the country a global leader in electric car adoption. In India, the government’s UJALA programme is helping to replace hundreds of millions of light bulbs in homes and businesses with energy efficient LEDs through policies including a tender for large-scale LED bulb procurement, agreements with state government and utilities to distribute bulbs and the option to pay for bulbs through electricity bills.

Public-private partnerships, too, can open the door to energy savings that benefit all parties. For example, recovering heat from industrial plants can help to power cities — in PwC’s experience, by as much as 25%.

Amid the focus on growing and greening our energy supply, the demand side of the equation can sometimes get less attention. Indeed, PwC’s research with the IBC shows that while 82% of companies discuss emissions intensity at board level, only 42% of companies do so for energy intensity (how much energy is consumed for a given outcome). This is a mistake.

With the world’s population expected to grow by 2 billion by 2050, and GDP forecast to double with a consequent increase in energy demand, it is clear energy security, affordability and sustainability cannot be guaranteed by focusing on energy supply alone. Dramatically increasing our energy efficiency alongside greening supply is entirely achievable — and it can be done rapidly and cost efficiently. This, in turn, will help to enable the world to have plentiful, affordable and clean energy to power the 21st century.