Sustainability discussions have long neglected energy efficiency. This is even though inefficient use of energy leads to both financial and environmental costs in the micro- and macroeconomic space.
Reducing the energy required to produce goods and services is crucial. This is an easier way to reduce production costs, associated emissions, and the capital costs required for the construction of new power plants.
Kenya has made progress toward energy efficiency goals. It is signatory to international treaties and has developed national policy instruments and strategies towards this.
Sustainable Development Goal 7 (SDG 7), for example, seeks to ensure universal access to affordable, reliable, sustainable, and modern energy. Prioritizing several targets, including a substantial increase in the share of renewable energy in the global energy mix and doubling the global rate of improvement in energy efficiency by 2030, was necessary to achieve this.
By doubling the global rate of improvement in energy efficiency, energy consumption can be reduced while maintaining the same level of energy services.
Energy efficiency will therefore make energy more affordable and accessible, bringing other benefits that extend across several SDGs.
Further, improving energy efficiency together with electrification, behavioral change, and digitalization will have a significant impact on reducing the global energy intensity.
It is for this reason that energy efficiency is currently gaining a strong global focus among policymakers in recognition of its important role in enhancing energy security and affordability and in accelerating clean energy transitions.
The energy sector is responsible for three-quarters of global emissions, and transforming it is critical to tackling climate change. At the UN’s COP28 in Dubai in December 2023, 133 parties pledged to the Global Renewable and Energy Efficiency Pledge, advocating for an integrated strategy and international cooperation to integrate energy efficiency with renewable energy.
The parties committed to doubling the annual average rate of energy efficiency improvements to 4% by putting energy efficiency at the core of policymaking, planning, and major investment decisions.
Promoting renewable energy without enhancing energy efficiency on both the supply and demand sides could result in energy waste and continued reliance on fossil fuels.
The combined approach of increasing renewable capacity and enhancing energy efficiency is crucial for reducing dependence on fossil fuels and achieving a cost-effective transition to renewable energy.
Enhancing energy efficiency reduces the overall demand for energy resources, enabling a rise in the share of renewables in the energy mix, which in turn reduces the environmental impact of energy production and consumption. This will enhance energy security by making energy systems more resilient and less dependent on fossil fuels.
The global energy efficiency rates, according to IEA, improved by 2% in 2022. This improvement was double the pace of gains in the previous five years, but it slowed to a 1.3% improvement in 2023.
In terms of investment growth in energy efficiency-related measures in 2023, there was a reduction in growth from 16% in 2022 to 4% in 2023, reaching USD 624 billion in investments. Current policies predict a further 50% increase in efficiency-related investment, reaching nearly USD 910 billion annually by 2030.
However, these levels are still around half of the energy efficiency-related investment needed in the second half of the decade to realize the Net Zero scenario goals of over USD 1.8 trillion in 2030.
According to the IEA’s Net Zero Scenario, doubling energy efficiency improvements from 2% to 4% annually would reduce global energy-related CO₂ emissions by almost 11 Gt CO₂ in 2030.
In addition to energy savings and carbon emission reductions, other benefits would accrue from continuing to increase energy efficiency. To achieve the efficiency improvements outlined in the IEA’s Net Zero scenario, the energy demand side would create around 12 million new jobs by 2030.
This primarily comprises high- and medium-skilled workers from the professional, construction, and manufacturing sectors, who are needed to support renovations and new buildings, the deployment of electric vehicles, and energy management.
Electrification holds significant potential to reduce final energy demand, given that electric technologies are generally more efficient than fossil fuel-based alternatives.
Electrifying sectors such as transportation (electric vehicles) and heating (heat pumps) is leading to more efficient energy use, especially when combined with renewable energy sources. Fully electrified energy systems can cut final energy consumption by up to 40%.
Hard-to-abate sectors could potentially utilise green hydrogen as a promising clean energy carrier. It can produce high-temperature heat to power industrial processes—all while emitting zero greenhouse gases.
Transportation, power generation, and building heating can also utilize hydrogen. There are ongoing efforts to improve the overall efficiencies of green hydrogen production and conversion technologies.
The Energy Act 2019 mandates the Energy and Petroleum Regulatory Authority (EPRA) to develop and implement national energy efficiency and conservation programs. The Authority executes this mandate through regulations and initiatives on energy management, targeting designated high-energy-consuming facilities and establishing minimum energy performance parameters for key appliances.
The Energy (Energy Management) regulations, 2012, require facilities consuming more than 180,000 kWh of energy to conduct energy audits at least once every three years and implement the identified energy-saving measures, among other obligations.
The Authority, through the Energy (Appliances’ Energy Performance and Labelling) Regulations (2016), has also established minimum energy performance standards (MEPS) for appliances such as household refrigerators, non-ducted air conditioners, three-phase induction motors, and general service lamps.
The MEPS ensures that the least efficient appliances are excluded from the market, while the labelling program provides consumers with accurate and comparable information on the appliance’s energy efficiency performance.
This enables consumers to make informed decisions when purchasing these appliances.
There still exists a significant potential to improve energy efficiency rates in Kenya, especially among the designated facilities, as well as through the setting of MEPS for more household appliances.
The Authority is in the process of reviewing the two regulations with a view to incorporating additional regulatory tools, such as the establishment of energy benchmarks for various sectors and a framework governing the operations of energy savings companies (ESCOs), among others.
The adoption of these revised regulations is expected to revolutionize the energy efficiency subsector in Kenya, enabling the country to fast-track the achievement of its obligations under the Paris Agreement.
Despite the high benefits and low cost of energy efficiency as a major solution for reducing production costs and mitigating climate change, many energy efficiency opportunities remain untapped due to multiple barriers, including limited technical skills and inadequate financing.
The establishment of ESCOs in Kenya is expected to unlock the potential for the implementation of energy efficiency projects through the provision of structured financial products and technical expertise to the facilities.
ESCOs will therefore play an important role in boosting private investments in the implementation of energy efficiency projects. The establishment of a super ESCO by KPLC to address both public- and private-sector opportunities for ESCOs will also help in fostering the growth of the ESCO industry in Kenya.
It is expected that the Super ESCO will facilitate the development and implementation of energy efficiency projects (including the financing) but subcontract implementation to private-sector ESCOs.
The public sector entities have generally lagged their private sector peers in undertaking energy efficiency projects, and KPLC’s Super ESCO could play an important role by establishing a revolving fund to support the implementation of these projects.
Ronald Ketter, Eustace Njeru, and Ignatius Chirchir are Manager Energy Efficiency, Senior Officer Energy Efficiency, and Energy Efficiency Officer, respectively, in EPRA.
