Compassionate Curmudgeon

Saving Fuel is Cheaper than Buying It

The September issue of Scientific American has a must-read article on energy by Amory B. Lovins. It is available (probably for a limited time) in a PDF file: http://sciam.com/media/pdf/Lovinsforweb.pdf

Here are some excerpts:

A basic misunderstanding skews the entire climate debate. Experts on both sides claim that protecting Earth’s climate will force a trade-off between the environment and the economy. According to these experts, burning less fossil fuel to slow or prevent global warming will increase the cost of meeting society’s needs for energy services, which include everything from speedy transportation to hot showers. Environmentalists say the cost would be modestly higher but worth it; skeptics, including top U.S. government officials, warn that the extra expense would be prohibitive. Yet both sides are wrong. If properly done, climate protection would actually reduce costs, not raise them. Using energy more efficiently offers an economic bonanza—not because of the benefits of stopping global warming but because saving fossil fuel is a lot cheaper than buying it.

[...]

The U.S. now uses 47 percent less energy per dollar of economic output than it did 30 years ago, lowering costs by $1 billion a day. These savings act like a huge universal tax cut that also reduces the federal deficit. Far from dampening global development, lower energy bills accelerate it. And there is plenty more value to capture at every stage of energy production, distribution and consumption. Converting coal at the power plant into incandescent light in your house is only 3 percent efficient. Most of the waste heat discarded at U.S. power stations—which amounts to 20 percent more energy than Japan uses for everything—could be lucratively recycled. About 5 percent of household electricity in the U.S. is lost to energizing computers, televisions and other appliances that are turned off. (The electricity wasted by poorly designed standby circuitry is equivalent to the output of more than a dozen 1,000-megawatt power stations running full-tilt.) In all, preventable energy waste costs Americans hundreds of billions of dollars and the global economy more than $1 trillion a year, destabilizing the climate while producing no value.

If energy efficiency has so much potential, why isn’t everyone pursuing it? One obstacle is that many people have confused efficiency (doing more with less) with curtailment, discomfort or privation (doing less, worse or without). Another obstacle is that energy users do not recognize how much they can benefit from improving efficiency, because saved energy comes in millions of invisibly small pieces, not in obvious big chunks. Most people lack the time and attention to learn about modern efficiency techniques, which evolve so quickly that even experts cannot keep up. Moreover, taxpayer-funded subsidies have made energy seem cheap. Although the U.S. government has declared that bolstering efficiency is a priority, this commitment is mostly rhetorical. And scores of ingrained rules and habits block efficiency efforts or actually reward waste. Yet relatively simple changes can turn all these obstacles into business opportunities.

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Consider my own house, built in 1984 in Snowmass, Colo., where winter temperatures can dip to –44 degrees Celsius and frost can occur any day of the year. The house has no conventional heating system; instead its roof is insulated with 20 to 30 centimeters of polyurethane foam, and its 40-centimeter-thick masonry walls sandwich another 10 centimeters of the material. The double-pane windows combine two or three transparent heat reflecting films with insulating krypton gas, so that they block heat as well as eight to 14 panes of glass. These features, along with heat recovery from the ventilated air, cut the house’s heat losses to only about 1 percent more than the heat gained from sunlight, appliances and people inside the structure. I can off set this tiny loss by playing with my dog (who generates about 50 watts of heat, adjustable to 100 watts if you throw a ball to her) or by burning obsolete energy studies in a small wood stove on the coldest nights.

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The proper role of government is to steer, not row, but for years officials have been steering our energy ship in the wrong direction. The current U.S. energy policy harms the economy and the climate by rejecting free-market principles and playing favorites with technologies. The best course is to allow every method of producing or saving energy to compete fairly, at honest prices, regardless of which kind of investment it is, what technology it uses, how big it is or who owns it. For example, few jurisdictions currently let decentralized power sources such as rooftop solar arrays "plug and play" on the electric grid, as modern technical standards safely permit. Although 31 U.S. states allow net metering—the utility buys your power at the same price it charges you—most artificially restrict or distort this competition. But the biggest single obstacle to electric and gas efficiency is that most countries, and all U.S. states except California and Oregon, reward distribution utilities for selling more energy and penalize them for cutting their customers’ bills. Luckily, this problem is easy to fix: state regulators should align incentives by decoupling profits from energy sales, then letting utilities keep some of the savings from trimming energy bills.

The whole article is worth a read.

Posted by jt at September 2, 2005 02:32 PM