Using energy: food, materials, mobility and buildings: Buildings and appliances

5.1 Building energy is mostly low-temperature heat, but the mix depends on climate and income

Buildings use energy for space heating, water heating, cooking, cooling, lighting and a long list of appliances and electronics. In cold, rich countries such as Germany or northern China, space heating dominates, often more than half of household energy, and comes mostly from natural gas, oil, coal or district heat. In hot countries cooling grows with income. In poorer homes across South Asia and Africa, cooking dominates, and much of it still uses wood, dung, crop residues or charcoal on open fires or simple stoves.

Those open fires are among the least efficient converters in use. Smil puts open-fire cooking below 10% efficiency: most of the heat escapes around the pot. A liquefied petroleum gas (LPG) burner delivers perhaps 50 to 60% of its fuel's energy to the pot, and an induction hob over 80% of its electricity. So when a household switches from wood to LPG, its final energy use can fall sharply even as it cooks more, and indoor smoke, a leading cause of illness, falls too. India's push to connect poor households to LPG is, in energy terms, a large efficiency programme as well as a health one.

Almost all building heat is needed at low temperatures, under about 60 degrees Celsius for rooms and water. That is important. Burning gas at over 1,000 degrees to warm a room to 21 degrees wastes most of the fuel's thermodynamic potential, even if the boiler is 90% efficient by the usual measure. Heat pumps, which move ambient heat rather than create it, are the natural match for low-temperature needs. Good insulation, airtightness and shading reduce the need in the first place, and they last for the life of the building.

• Smil, Energy: A Beginner's Guide (2006) · via Smil Mastery Course, M1 'Conservation and efficiency'
• United Nations Statistics Division, Energy Statistics Yearbook 2023, Table 3: Total final consumption and its components (2023 data) · web

5.2 Cooling is the fastest-growing use in buildings, and the efficiency gap is large

Since 2000, space cooling has been the fastest-growing energy use in buildings, rising by more than 4% a year according to the IEA's Energy Efficiency 2025 report. The driver is simple: rising incomes in hot, populous countries. India, Indonesia and much of Africa are only at the start of air-conditioner ownership. A single split air conditioner can draw 1 to 2 kilowatts, more than every other appliance in a typical Indian home combined, and many run during the evening peak when grids are most strained.

An air conditioner is a heat pump running in reverse. It uses a compressor and a refrigerant to move heat from inside to outside. Its performance is measured by how many units of heat it moves per unit of electricity. Efficient units move five or more. Cheap units move closer to three. That gap is mostly a matter of better compressors, larger heat exchangers and variable-speed motors, not new science.

The IEA's estimate of the gap is striking. Had every air conditioner sold worldwide since 2019 been the most efficient model available, the world would have avoided extra electricity demand about as large as the growth in demand from data centres over the same period. Many appliances on sale today are only half as efficient as the best on the market.

The lesson for investors is that minimum efficiency standards and labels, such as India's star-rating scheme for air conditioners and refrigerators, can shift a very large and fast-growing load at almost no extra cost to the grid. Building design matters as well. Shading, light-coloured roofs, ceiling fans and insulation can cut cooling needs before any machine is bought, and every kilowatt avoided at peak saves generation, transmission and distribution capacity.

• IEA, Energy Efficiency 2025: Executive summary, International Energy Agency, 2025 · web
• Smil, Energy: A Beginner's Guide (2006) · via Smil Mastery Course, M1 'Conservation and efficiency'

5.3 Lighting shows how much a better converter can save across a whole chain

Lighting is the cleanest illustration of Smil's point that converters, not just fuels, shape energy use. An incandescent bulb turns only about 2 to 5% of its electricity into visible light. The rest is heat. Now follow the whole chain from coal. A coal power plant turns about 38% of the coal's energy into electricity. Transmission and distribution deliver about 93% of that to the home. The bulb turns about 5% into light. Multiply the steps and only about 1.8% of the coal's energy becomes light.

Swap the bulb for an LED and the chain improves about six to seven times without any change at the power station. That is why the global shift to LEDs over the past fifteen years has been one of the largest and cheapest efficiency gains in history. The IEA notes that the efficiency of the best light bulbs doubled in fifteen years, while minimum standards rose by only about 30%, so the average bulb on sale still lags the best.

The same multiplication logic applies to every appliance. A refrigerator runs all day, every day, for fifteen years, so a small gain in its compressor and insulation adds up to a large saving. Electric motors in pumps and fans, which use a large share of the world's electricity, can often cut their use by a fifth or more with variable-speed drives that match output to need.

The pattern is consistent. The energy wasted at the end of the chain is multiplied back up the chain. Saving one unit at the bulb, the motor or the compressor saves two to three units of fuel at a thermal power plant. That is why efficiency at the point of use is often the cheapest supply of all.

• Smil, Energy: A Beginner's Guide (2006) · via Smil Mastery Course, M1 'Conservation and efficiency'
• IEA, Energy Efficiency 2025: Executive summary, International Energy Agency, 2025 · web

See it in the table

Check your understanding

Why does switching a household from an open wood fire to LPG often reduce its final energy use?

The IEA says that if all air conditioners sold since 2019 had been best-in-class, the avoided demand would roughly equal:

In the coal-to-light chain, swapping an incandescent bulb for an LED improves the overall result about: