Harnessing the potential of energy efficiency in developing countries could fast-track affordable and secure energy, strengthen economies, and create jobs, according to a new World Bank report. The report, titled "Power More with Less: Scaling up Energy Efficiency for Growth and Energy Security," emphasizes that for every dollar invested in energy efficiency, returns between $3 to $5 can be expected.
The report advocates for governments to prioritize energy efficiency in their energy policies. It suggests that improved energy efficiency can reduce future investments in energy supply significantly—up to $11.6 billion in power savings by 2050 for a typical middle-income country. In 2022, the sector employed nearly 11 million people worldwide.
"Energy efficiency is no longer optional—it is a necessity for countries seeking affordable and reliable energy for their people while driving economic growth and creating jobs," said Guangzhe Chen, World Bank Vice President for Infrastructure. The report provides a roadmap to develop large-scale programs to unlock this potential.
With almost two-thirds of the world's primary energy wasted, the report calls on governments, financial institutions, and private sectors to shift from small-scale projects to national programs across all sectors. These efforts are crucial as they help manage rising power demand and prevent overspending on new infrastructure.
However, current investments in emerging economies are limited due to political challenges, inadequate financing, and unreliable information. Low-income countries face significant barriers due to high capital costs and limited access to financing.
The report highlights the need for collaboration among governments, partners, and the private sector. Multilateral development banks and donor partners should work together with client countries to prioritize government policies supporting energy efficiency. Technical assistance and financing will aid these transitions from smaller projects to national initiatives.