Today’s fossil energy system is incredibly inefficient: almost two-thirds of all primary energy is wasted in energy production, transportation, and use, before fossil fuel has done any work or produced any benefit. That means over $4.6 trillion per year, almost 5% of global GDP and 40% of what we spend on energy, goes up in smoke due to fossil inefficiency. Literally.

Summary

Today’s energy system is incredibly inefficient. We waste almost 400 exajoule (EJ) of all energy going into our energy system (two-thirds of total), worth over $4.5 trillion, or almost 5% of global GDP — all before any value is created with energy.

The main culprit is the widespread use of fossil fuels. The majority of energy losses are driven by the inherent inefficiencies of producing and delivering fossil fuels (177 EJ per year), transportation (19 EJ per year), and use (183 EJ per year).

The standout waste is from fossil fuel power plants and Internal Combustion Engines (ICEs). These two technologies combined are responsible for almost half the energy waste globally.

Fossil inefficiency is fossil fragility. Inefficient energy use is vulnerable to more efficient alternatives, as competition by more efficient solutions can deliver more or better services, more conveniently, at lower cost.

We have seen this before. Fossil fuel technologies themselves rose to prominence a century ago through competing on efficiency, pushing out less efficient technology and fuels along the way.

It is happening again. Both more efficient end-use and new clean supply technologies – solar, wind, heat pumps, electric vehicles, and many more – all undercut fossil fuels where they are at their weakest: rampant inefficiency.