Published December 8, 2025
By NZero
Energy efficiency progress has slowed since 2019, remaining around 1.3 percent annual improvement compared with the 4 percent annual rate required to meet global 2030 goals. Although this slowdown is often framed as a challenge, the underlying forces behind it signal areas where targeted interventions can deliver the fastest and most cost effective gains. Rising industrial demand, policy lag behind technology, rapid cooling uptake and electricity demand outpacing renewable growth each represent strategic opportunities to unlock the next wave of global efficiency improvements.
Industrial energy demand has grown to represent nearly two thirds of global final energy demand growth since 2019. This concentration creates an opportunity for large scale energy savings per intervention. Industrial energy intensity improvements have slowed to below 0.5 percent per year compared with nearly 2 percent annually in the previous decade. At the same time, available technologies and management practices can reverse this trend.
Motor systems represent roughly 60 percent of global industrial electricity use and upgrading to higher efficiency classes can deliver paybacks in less than two years. Deploying heat pumps for low temperature industrial heat can reduce process heat demand significantly, while energy management systems routinely identify savings of ten to thirty percent in facilities across multiple sectors. Countries such as China and India are already showing signs of renewed intensity improvement, offering an indication that industrial demand growth can be matched with meaningful efficiency gains.
Many countries have efficiency standards that have not kept pace with rapid improvements in appliance and equipment technology. When best available products are often twice as efficient as the average product sold, policy updates can rapidly increase the efficiency of new stock entering the market.
Lighting provides a clear example. Over the past fifteen years, best in class lighting efficiency has doubled while global minimum performance standards increased only 30 percent. Air conditioner performance shows a similar trend. Raising minimum requirements can quickly align markets with available technologies. Countries such as Singapore and Mexico have recently strengthened standards, demonstrating the scale of progress achievable once policy ambition catches up with technological potential.
Space cooling has been the fastest growing building end use since 2000, increasing more than four percent annually. Rising incomes across emerging economies have expanded access to air conditioning, improving comfort and safety in hotter climates. This growth brings with it substantial efficiency potential.
If all air conditioners sold since 2019 had matched the highest available efficiency levels, global electricity demand growth for cooling would have been significantly lower. Improving minimum performance standards for cooling, strengthening passive design requirements in building codes and expanding consumer access to efficient systems all present opportunities to capture these benefits. Combining efficient cooling equipment with measures like higher thermostat set points and fan assisted ventilation further reduces electricity use while maintaining comfort.
Electricity demand has grown two to three times faster than total energy demand since 2019. In some regions, this has led to increased use of less efficient fossil generation to meet peak or unexpected loads. As renewable energy deployment accelerates, the ability to manage and moderate electricity demand grows increasingly important for system stability and cost control.
Efficiency measures reduce both overall and peak electricity needs, delaying or avoiding costly network upgrades. Demand flexibility mechanisms allow consumers to shift usage to times of lower system stress or higher renewable output. Several countries have expanded dynamic tariff structures, time of day pricing and automated demand response programs. These measures are becoming more valuable as electricity price volatility rises and renewable penetration increases.
The factors contributing to slower global efficiency progress highlight where the most impactful interventions can be made. Industrial demand concentration offers a path to large scale savings. Updating efficiency policies to match modern technologies can unlock immediate reductions in energy use. Rapid cooling demand creates an opportunity to deliver efficient comfort for growing populations. Rising electricity demand strengthens the case for efficiency and flexibility within power systems. Together these shifts can accelerate progress toward global efficiency goals when supported by strong policy action and sustained investment.
