How IEA’s Energy Efficiency 2025 Will Impact Your Building Investments

Global Energy Efficiency Goals: A Worrying Trend

As the world rapidly evolves, the International Energy Agency's (IEA) new report on energy efficiency underscores a dire lag in the global commitment to sustainability. The IEA’s Energy Efficiency 2025 report indicates that while ambitious efficiency targets were set to double gains by 2030, the actual progress since 2019 averages a mere 1.3%—far below the anticipated 4%. This stagnation is primarily attributed to the built environment, revealing a pressing need for rigorous reform.

Targeted Improvements: Codes, Retrofits, and Digital Optimisation

The IEA highlights three crucial areas for improvement: stronger building codes, investments in retrofitting existing structures, and enhanced digital optimisation. Currently, 95 mandatory codes for residential buildings and 97 for non-residential structures exist, yet they encompass only 60% of new buildings globally. Moreover, energy codes focus largely on the design of buildings rather than their operational functionalities, often neglecting real-time energy management. This gap is significant, as pointed out by Donatas Karčiauskas, CEO of Exergio—“Building energy codes say a lot about how efficiently a building should be designed, but almost nothing about how energy management systems inside those buildings should run.”

Retrofitting: The Key to Realising Energy Savings

Investments in retrofitting are set to surpass $120 billion by 2024. This represents a more than 20% increase over previous years, particularly in regions like the U.S., China, and the EU. However, effective implementation remains critical. Even with significant upgrades, a building can still fall short of efficiency goals due to poor operational practices. For instance, maintaining a comfortable temperature floor after hours or mismanaging heat and cooling systems can squander the energy saved from upgrades. The real challenge lies in integrating smart operational practices with new energy-efficient technologies.

Digital Efficiency: A Fast-Track to Savings

Digital optimisation has emerged as a powerful tool, presenting opportunities for up to 40% energy savings without necessitating new equipment purchases. Numerous regulations, particularly in the EU, now mandate advanced automation in commercial settings, marking significant evolutionary progress in how energy is consumed. As more nations implement these digital frameworks, the path to energy efficiency could become smoother, fostering a climate conducive to intelligent energy management.

Challenges Ahead: Addressing Cooling Demand and Skills Gap

As energy efficiency practices evolve, the growing demand for cooling, particularly in residential sectors, poses a formidable challenge. The IEA warns that inefficient cooling technologies significantly undermine efficiency efforts, which can be resolved through better planning and installation practices in new builds. In addition, the construction industry faces an impending skills gap. With 72% of energy efficiency employers expressing difficulty in filling positions due to skill shortages, preparing the workforce is as essential as improving technology.

Your Next Steps as Stakeholders in the Built Environment

For property developers, facility managers, and business owners, the question is not just how to comply with efficiency standards, but how to exceed them. Investment today not only aligns with sustainability goals but can also yield substantial long-term savings. By adopting smarter operational strategies alongside advanced technologies, stakeholders can optimise their buildings’ energy use while benefitting from lower operational costs and enhanced sustainability.