"World on Edge details the vice closing around us: a quadruple squeeze of global warming and shortages in food, water and energy. Then it explains the path out—and how little time we have left to take that path. Got anything more important to read than that?" —Peter Goldmark, former head of the Port authority of New York and New Jersey, President of the Rockefeller Foundation, and CEO of the International Herald Tribune
Chapter 5. Building the Solar/Hydrogen Economy: The Energy Efficiency Base
When the new Bush energy plan was announced, many were surprised at the near-exclusive emphasis on expanding production, with little attention given initially to the potential for using energy more efficiently. In response, the Washington-based Alliance to Save Energy issued a counterproposal, one that would eliminate the need to build most of the 1,300 proposed power plants. It would also be far less costly and less polluting.10
Bill Prindle, Director of the Alliance's building and utility programs, pointed out that adopting the household appliance efficiency standards agreed to by both the Clinton and the Bush administrations would eliminate the need for 127 power plants by 2020. If the more stringent residential air conditioner efficiency standard that was approved by the Clinton administration were adopted, this would do away with the need for another 43 power plants. Stronger standards for commercial air conditioning would take care of needing 50 plants. Increasing the energy efficiency of new buildings over the next 20 years using tax credits and energy codes would save another 170 plants. And improving the energy efficiency of existing buildings, including air conditioners, commercial lighting, and commercial cooling, would save 210 plants.11
Prindle's list goes on, but these five measures alone would eliminate the need for 600 power plants. The costs of the measures to avoid these plants would be far less than the cost of building them. All of these steps to save electricity are cost-effective, some of them offering 30 percent annual rates of return.12
Peter Coy, economics editor at Business Week, points out that time-of-day pricing of electricity, which would increase prices during the peak daytime hours and reduce them at night, would also greatly reduce the generating capacity needed. Although he did not calculate the number of plants that could be saved, it would undoubtedly eliminate the need for another large block.13
Amory Lovins of the Rocky Mountain Institute has gained a worldwide reputation selling the idea that it is cheaper to save energy than to buy it. In response to his persuasive presentations about the returns on investment in improved efficiency being often 30 percent or more a year, many companies have invested heavily in reducing their energy use. But even with the efficiency gains since the oil price hikes of the 1970s, Lovins believes that U.S. businesses could still cut their electric utility bills in half while making money doing so.14
Europe's example provides ample proof of the latent energy savings potential in the United States. Europeans routinely use 30 percent less energy per unit of gross national product than Americans do. The United States could easily meet its requirements for carbon reduction under the Kyoto Protocol by 2010 simply by moving to European efficiency levels, and these are far below the efficiency levels that are possible using state-of-the-art technologies.15
Although Europe is already well ahead of the United States in energy efficiency, individual countries are continuing to advance. In early August 2001, the British introduced a new tax scheme to encourage investment in energy-saving equipment. Expenditures on capital equipment can now be subtracted from taxable profits if the equipment meets established energy efficiency standards. Among the categories of equipment eligible for the tax break are cogeneration (combined heat and power), boilers, electric motors, lighting, and refrigeration. This plan was modeled on a similar system already operating successfully in the Netherlands.16
China is now setting the pace in increasing energy efficiency and reducing carbon emissions. Over the last four years, China has apparently reduced its carbon emissions, even while its economy grew 7 percent annually, using subsidy phaseouts for coal, market pricing for fuels, and new energy conservation initiatives. For example, China will soon start to produce a high-efficiency refrigerator that will use only half as much electricity as conventional models.17
Some of the worldwide potential for saving energy can be seen in the substitution of compact fluorescent lamps (CFLs) for traditional incandescent light bulbs. The compact fluorescent uses less than one fourth as much electricity, and though it costs more than an incandescent, it lasts 13 times as long. Over three years, using the light four hours a day, the electricity and bulb cost $19.06 for a compact fluorescent and $39.54 for an incandescent. Even excluding the labor costs of replacing the short-lived incandescent bulbs six times during the three years, the return on investing in a compact fluorescent lamp is still close to 30 percent a year.18
As I travel from country to country launching books and addressing conferences, I routinely check the light bulbs in hotel rooms. Some hotel chains use CFLs almost exclusively. Others use very few or none at all. The worldwide potential for investing in compact fluorescent lamps and closing power plants in the process is not only huge, it is also profitable.
Another area with enormous potential for efficiency improvements is automobile fuel. In the United States, which has one of the world's most inefficient vehicle fleets, the new 2001 models get an estimated 24.5 miles per gallon, down from the peak of 26.2 miles per gallon in 1987. Thus fuel efficiency dropped 6 percent when, given the advances in technology and growing concern about global warming, it should have been rising. Fortunately, at this writing, it appears that Congress may take the lead and establish new fuel efficiency standards for the next decade or so.19
The fuel efficiency among the 2001 models sold in the United States varies widely, ranging from the hybrid electric Honda Insight, which gets 68 miles per gallon on the highway and 61 in the city, to a Ferrari, with 13 miles per gallon on the highway and 8 in the city. Just above the Ferrari in the fuel ratings are several large sport utility vehicles. The more efficient cars on the market, such as the Honda Insight and the Toyota Prius, easily double the average fuel efficiency of the U.S. fleet, underlining the enormous potential for fuel savings.20
Regardless of the source of energy, it makes economic and environmental sense to make sure the energy is used efficiently. At a minimum, the world should be making all the investments in energy efficiency that are profitable with current prices. That alone would drop world energy use by a substantial amount.
Sometimes a simple measure can make a big difference. In Bangkok, the city government decided that at 9 p.m. on a given weekday evening, all major television stations would be co-opted in order to show a big dial with the city's current use of electricity. Once the dial appeared on the screen, everyone was asked to turn off unnecessary lights and appliances. As viewers watched, the dial dropped, reducing electricity use by 735 megawatts, enough to shut down two moderate-sized coal-fired power plants. For viewers, this visual experiment had a lasting effect, reminding them that individually they could make a difference and that collectively they could literally close power plants.21
The purpose of this section is simply to provide a sense of potential energy savings. A successful global effort in this direction would lower energy expenditures and help reduce air pollution and climate disruption while the new energy sources are coming online. Even as hydrogen-fueled engines are being developed, it would reduce vulnerability to oil price hikes—a matter of concern for many governments.
10. Bill Prindle, "How Energy Efficiency Can Turn 1300 New Power Plants Into 170" (Washington, DC: Alliance to Save Energy, 2 May 2001).
12. Ibid.; 30 percent return in Poornima Gupta, "US, Industry Energy Efficiency Program Saves 75 Bln KW Power," Reuters, 22 March 2001.
13. Peter Coy, "Electricity: Reforms That Will Save Money," Business Week, 11 June 2001, p. 140.
14. Janet Ginsburg, "Amory Lovins: 'Efficiency Goes Straight to the Bottom Line,' Asserts the Alternate-Energy Guru in an Interview," Business Week, 7 April 2001, p. 198.
15. Burton Richter, "Energy, The Key: Reduce Demand," Los Angeles Times, 20 May 2001.
16. "Britain Gives Tax Relief for Energy-Saving Investments," SolarAccess.com, 1 August 2001.
17. Erik Eckholm, "China Said to Sharply Reduce Carbon Dioxide Emissions," New York Times, 15 June 2001; Susan M. Booker, "Chinese Fridges Keep Food and the Planet Cool," Environmental Health Perspectives, 4 April 2000, p. A164.
18. Alliance to Save Energy, "Enlightening Comparisons," www.ase.org/powersmart/fbulbs.htm, viewed 1 August 2001; U.S. Department of Energy (DOE), Energy Information Administration (EIA), Residential Lighting Use and Potential Savings (Washington, DC: September 1996).
19. Keith Bradsher, "Fuel Economy for New Cars Is at Lowest Level Since '80," New York Times, 18 May 2001; likely congressional action from Senator John Kerry and others, discussion with author, Washington, DC, 17 July 2001.
20. "Honda Insight Tops EPA Fuel Economy List for 2001," Reuters, 3 October 2000; "Honda Has New Fuel-Cell Car, Toyota Expands Hybrids," Reuters, 29 September 2000.
21. In letter from Donella Meadows to Linda Harrar, independent documentary producer, Boston, MA, undated.
Copyright © 2001 Earth Policy Institute