Energy Efficiency in Developing Nations

By: EconomyWatch   Date: 30 April 2010

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The demand for energy in the developing countries is rising at a rapid rate and this is one of the major concerns for the whole world. In order to stimulate economic growth, developing countries have been promoting their industrial sector. With the emergence of new companies, energy consumption as well as pollution has been rising. In these situations, promoting energy efficiency in developing countries has become a major challenge for international organizations.

Several survey reports show that nearly 50% of the total energy consumption in developing countries is by the industrial sector of these countries. The primary energy consumption rate in the developing countries has been increasing at an average of 5% every year whereas in the developed countries, this rate is between 0.5% -0.6%. The energy intensiveness of the industrial sector is very high as there are a number of activities related to this sector that ranges from extracting resources to producing finished goods. This diverse nature of work is the main problem in reducing energy consumption in this sector. More than this, the dilemma faced by the national governments of these developing countries is that if they reduce energy consumption, the growth of the industrial sector will slow and reduce the rate of economic development. That is not a politically acceptable option in many if not most developing countries.

Another important factor related to energy consumption in developing countries is of population growth. The population growth rates are very high in a number of developing countries and with this population growth, demand for new houses, office buildings, electrical home appliances etc. will also rise. With these developments, energy consumption is also expected to rise rapidly.

In such situations, increasing energy efficiency is the most important factor. A large number of international organizations like the United Nations Organization, World Bank, United Nations Foundation, ESMAP, ASTAE, UK DFID, Alliance to Save Energy and many more are working for the purpose. These organizations, along with the national government and national organizations of the developing countries are involved in creating various strategies to promote energy efficiency in developing nations. These organizations are also arranging the necessary finances for the purpose through several grants and private investments. At the same time, ESCOs or Energy Service Companies are also playing a major role in reducing energy consumption in the developing countries. The national governments are also providing full support to these companies for the purpose.


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