World Bank Group Support to Demand-Side Energy Efficiency

Improving energy efficiency—using less energy to do the same amount of work—has both supply-side and demand-side aspects. Improvements in energy efficiency are reductions in the energy required to maintain or improve energy services to households, businesses, and communities. Supply-side energy efficiency approaches target energy generation via grid infrastructure, utilities, and power producers. Demand-side energy efficiency (DSEE) focuses on the energy use of industries, commercial entities, and households. The Bank Group has committed to supporting DSEE which focuses on the energy use of industries, commercial entities, and households. DSEE is critical for energy savings and reducing greenhouse gases in line with the Paris Agreement and relevant sustainable development goals (SDGs) and increasingly for contributing to energy security. This evaluation focuses on the World Bank Group’s approaches to DSEE and opportunities to scale them up, and proposes four near-term actions the Bank Group should take: (i) Intensify DSEE support to middle-income countries (MICs) for decarbonization and wider socioeconomic benefits. (ii) Develop energy efficiency sector-specific approaches in a select group of lower-middle-income countries (LMICs) that seek productivity gains alongside or via DSEE, even if EE policy reforms are in early stages. (iii) Expand DSEE approaches by incorporating reduction of indirect emissions (Scope 3), including embodied and operational carbon, in DSEE project design. (iv) Exploit untapped DSEE opportunities and help clients develop innovative approaches that adapt digital and financial solutions from developed countries.