It is estimated that more than 56% of all energy in the U.S. is wasted, and China’s energy waste is significantly worse. Some of this waste occurs during production, as fuels are burned and heat escapes. Inefficient power generation technologies and designs are also to blame. There are numerous aspects of power generation that have the potential for improvement, allow systems to do more with less and provide unique opportunities for new energy efficiency investments: factories and buildings can be made more energy efficient by use of insulation; LED lighting can be used to dramatically reduce electricity usage; and heat that is now wasted as exhaust can be recycled.

Not only has energy demand doubled in the thirty years through 2004, but also, according to the International Energy Agency (IEA), demand will grow by a further 53% between 2004 and 2030. The McKinsey Global Institute (MGI) is even more aggressive in its projections, expecting demand to rise 45% by 2020. The continued strong growth in energy demand is mainly driven by the rapid economic development in emerging markets, especially in China, India, Eastern Europe and the Middle East. Developing countries will account for more than 70% of the growth in energy demand until 2030, the IEA predicts.

According to the IEA, electricity consumption should grow nearly as fast as overall energy demand, almost doubling by 2030. In China, electricity usage should more than triple, driving electricity’s share of total end-user energy consumption from 16% to 21%. Therefore, China’s energy efficiency focus is both understandable and exciting, especially in terms of new energy efficiency investment opportunities.

With the huge energy market and its rapid growth going forward, energy efficiency will be a key component to match the world’s needs for both power and carbon-emissions reduction. Barron Partners is keenly focused on this area, monitoring potential energy investing opportunities across the globe but most especially in China’s energy efficiency solutions.