€10.5bn Annual Savings: Optimising Energy Timing in the UK & EU

A recent study by Danfoss discovered that using a special technology called demand-side flexibility can save a lot of money – €10.5 billion every year by 2030

Glenn Burgess

Danfoss’s new study reveals that a special technology called demand-side flexibility can save a huge amount of money – €10.5 billion every year by 2030. This not only lowers energy bills for people but also helps the environment by reducing pollution.

Using energy at the right time can help the EU and UK reach their goal of net zero without causing big problems, says a new report called “Energy Efficiency 2.0: Engineering the Future Energy System.”

This report was made by Danfoss, a company that focuses on heating, cooling, and renewable energy solutions. The study says that by the year 2050, 70% of our energy should come from renewable sources if we want to meet the goals of the Paris Agreement.

Kim Fausing, who is the president and chief executive of Danfoss, explained, “We are moving away from using fossil fuels, but we haven’t gotten our energy system ready for the future because we are not paying enough attention to energy efficiency. The power grid is not prepared to handle all the renewable energy we are working quickly to produce.”

Fausing emphasised that in the future, our energy system should rely more on things like electrification, using energy when it’s needed, making changes, storing energy, and combining different sectors. This will help us have a power grid that runs on renewable energy.

Energy efficiency is a keystone of net zero

Efficiently using global energy is super important. It not only helps us save money on bills and use less energy but is also a key part of switching to renewable energy.

It brings more economic benefits than using fossil fuels. Check out our guide to learn about what energy efficiency is and why it matters.

Toby Morgan, who works on buildings at Climate Group, says it’s “climate critical.” That means it helps reduce pollution right away and means we don’t need to build as many new energy facilities.

He explained, “The greenest form of energy is saving energy, and efficiency means we need fewer wind farms and fewer battery facilities.”

The International Energy Agency (IEA) says we need to double our energy efficiency by 2030 to meet the Paris Agreement. This could cut down on a lot of CO2 emissions, helping the environment.

It can also save a huge amount of money—$437 billion every year—in making industries use cleaner energy. This is especially good for businesses dealing with high energy costs while trying to reach climate goals.

Right now, rules like the RePowerEU plan in Europe, the Inflation Reduction Act in the US, and Japan’s Green Transformation initiative are pushing for more energy efficiency.

Saving billions using demand-side flexibility tech

Demand-side flexibility is about spreading out the use of energy so we don’t have times when lots of people need it, but there’s not enough to go around.

When there’s not enough, we often have to use dirtier energy from fossil fuels. Using this flexibility tech helps us use less energy during expensive peak times and cuts down on using fossil fuels.

For instance, a cool trick called ‘supercooling’ involves making supermarket freezers much colder than needed before busy times. This way, the freezers can be turned off during those busy hours, saving money and energy.

Danfoss looked into this and found that using demand-side flexibility could save a ton of money – €10.5 billion every year by 2030 and €15.5 billion by 2050 in the UK and EU.

It’s not just about saving money, though. This tech can also cut down on a huge amount of CO2 pollution – 40 million tons less every year by 2030, which is more than what Denmark puts out in a whole year.

It also means we can use way less natural gas – about one-fifth less than what the EU used in 2022. & we won’t need as many big batteries for power grid.

The best part? Regular people like you and me could save money on our electricity bills – around 7% less by 2030 and 10% less by 2050. Plus, if we get better at using the energy we already have, we won’t need to spend as much on big energy subsidies, like the ones the EU and UK set aside in response to the energy crisis.

Powered by intelligent insights

AI, cloud-based monitoring, and Internet of Things (IoT) data technologies play a big role in making things work even better. Let me break it down:

Imagine using smart technology powered by AI. It can look at data from buildings, the weather, and how people use energy. With all this info, it can predict when a building needs more ventilation or heating.

This alone can save up to 20% on energy costs for the building. There’s proof of this working in Finland, where they used AI in 100,000 flats and reduced how much power they needed by 10-30%.

Toby Morgan explained, “AI can do some really cool things. It can figure out the best time to use solar power when the sun is shining, decide when to use the building’s battery, or even the batteries in electric cars plugged into its charging stations.

And it’s smart enough to pick the perfect time to sell extra renewable electricity back to the grid when a lot of people need it.” This means AI helps us use clean energy more efficiently, making everything work better.

Electrification is a central tenet of energy efficiency

The main suggestion from the report is to make big changes in how we use energy. Here’s the breakdown:

Full-Scale Electrification: The report suggests using electricity for pretty much everything. This is not just because electrical technology is more efficient, but it also helps by replacing fossil fuels with clean, renewable electricity. Switching from fossil fuels to all-electric can cut down on 40% of the energy we use.

Demand-Side Flexibility: This means being smart about when we use energy. By using energy at the right times, we can save a ton of money and cut down on carbon emissions.

For example, in the US, making buildings more flexible with when they use energy could save a whopping $107 billion every year and reduce carbon emissions from buildings by 91% by 2050.

Maximising Excess Energy: Instead of wasting extra energy, the report suggests using it wisely. This helps us get the most out of the energy we produce.

Energy Storage: Storing energy when we have too much and using it when we need it is crucial. This can be done using technologies like batteries.

Hydrogen Use: The report suggests being smart about using hydrogen to avoid wasting energy during production.

Kim Fausing emphasised the importance of all these changes, saying, “It’s about time for decision makers to focus on using energy wisely and create the right rules and economic plans to reach the goal of net zero by 2050.”

In simpler terms, it’s time for leaders to make smart choices about how we use energy to reach our clean energy goals.

Harnessing excess heat from energy systems is crucial

A Danfoss report from earlier in 2023 uncovered a surprising fact: excess heat is the biggest source of untapped energy in the world.

Here’s the deal: in 2030, more than half (up to 53%) of the energy we produce globally will be wasted as excess heat.

But, the report shows that we can actually capture a big chunk of this heat using a process called electrolysis.

This captured heat can then be used to power machines, heat up buildings, and warm water. The key is to integrate this process strategically into different sectors.

Looking ahead to 2050, the report predicts that we can recover a whopping 1.228 TeraWatt-hours (TWh) of excess heat from hydrogen produced through electrolysis.

To put it in perspective, this is almost two-thirds of the heat we currently get globally from burning coal, which is the biggest source of heat right now.

So, there’s a lot of potential to make use of this wasted heat and turn it into something really valuable for our energy needs.

Conclusion

Demand-side flexibility is a big deal because it brings massive savings for businesses, governments, and regular folks.

Plus, it’s a key player in cutting down on using fossil fuels and making the switch to cleaner energy.

If we want to reach the goal of net zero emissions, we’ve got to make demand-side flexibility a top priority.

What’s cool about it is that, compared to other ways of reducing emissions, it doesn’t shake up the way things are usually done too much.

This means it’s easier for companies of all sizes to get on board and enjoy the advantages.

So, not only does demand-side flexibility save money, but it also makes the journey to cleaner energy smoother and more accessible for everyone.