The global energy demand is expected to increase by 40 per cent by 2050, according to a new World Economic Forum report developed in partnership with Accenture.

The report entitled 'The Energy Efficiency: Accelerating the Agenda,' which emphasized the urgent need for energy efficiency to be at the forefront of the global agenda, was presented on Tuesday at the Green Solutions Event at COP16 in Cancun, Mexico.

The estimated capital required to meet projected energy demand through to 2030 amount in cumulative terms to $26 trillion, the report stated.

"Of all the energy options, energy efficiency is able to provide the largest capacity for cutbacks in energy demand in the medium term. This potential can be measured in energy savings, cost savings and reduction in emissions."

Research has identified that of the carbon abatement required, 57 per cent could be achieved through implementation of energy efficiency measures by 2030, said the WEF report citing experts.

Despite commitments to energy efficiency made to date, there is a substantial gap between policy and implementation, challenging the concept of energy efficiency as “low hanging fruit”.

The report also sought the expertise from over 20 stakeholders across the public and private sectors to create a pulse check on where energy efficiency stands today and address solutions to bridge the gap.

The report revealed that reasons behind this gap range from market to institutional failures, that must be overcome if energy efficiency is to be used to meet rising energy demand, support economic development and meet the critical challenges of climate change, energy security and economic competitiveness.

“Tapping into the largely unrealized potential of energy efficiency will be critical for us to meet growing energy demand of the 21st century without leading to water, food or social crises,” said Pawel Konzal, head of the Oil & Gas Industry, WEF.

The report focuses much more on the roles that the varying stakeholder groups can play rather than on identifying industry-specific recommendations in an effort to provide cross-sector market clarity and identify market accountability.

It looks at three stakeholder groups – policy-makers, international and non-governmental organizations, and the private sector – and identifies the following key challenges:

Access to capital: Aggregating energy efficiency projects in a bankable way is not easy, so it is difficult to access capital

Regulation: Lack of the right regulatory structures means there is less incentive for investment in energy efficiency

Reporting: Measuring and reporting on energy efficiency is not uniform or well understood, leading to higher perceived risk and confusion

Skills and capacity: Lack of skills and supply chains to enable implementation of measures means there are insufficient energy efficiency investment opportunities

Standards: There are no international standards for globally traded products reducing the market size and incentive for improvement

“Energy efficiency remains a big prize, but it cannot be delivered by one set of stakeholders,” said Mark Spelman, Accenture’s Global Head of Strategy.

"To create a step change and capture the potential of energy efficiency, we must ensure a more systematic and rigorous dialogue between the public and private sectors. The private sector can do more for its part by beginning to forge more innovative global alliances," Spelman said.

"New business models combined with new financing mechanisms to support global scale-up will demonstrate the positive business case for energy efficiency," he noted.

The report’s output formed an integral part of private sessions co-hosted by the WEF and the Mexican Government at Green Solutions alongside the COP16 negotiations in Cancun, with the ultimate objective to inspire concrete action across stakeholder groups throughout 2011.-TradeArabia News Service