Modelling the potential for industrial energy efficiency in IEA's World Energy Outlook

The industry sector accounts for more than a third of global final energy consumption and nearly the same share of global energy-related CO2 emissions. Compared with other sectors, however, industrial energy modelling has received less attention due to the variety of sub-sectors, impact of energy-saving measures on product qualities and statistical problems. This paper explains how the industry sector is modelled in the World Energy Outlook and presents energy-saving opportunities from energy efficiency in the sector. Using the World Energy Model, a partial equilibrium model, it is found that exploiting the economic potential of energy efficiency can reduce energy demand growth in industry from 1.5 to 1.1 % per year on average over the period 2010-2035. Savings arise from faster adoption of more efficient technologies, phasing out older facilities, process change and system optimisation, including electric motor-driven systems. Significant barriers to the implementation of energy efficiency are the requirement for short payback periods and concerns that change could interrupt production or affect reliability. In order to realise the potential energy savings, policy makers need to address these issues by improving mechanisms for capacity building, energy management and financing.