Efficiency gains, if not properly managed, can quietly take away most of the present market for electricity. But they also offer alert utilities an unprecedented opportunity to control risk,...
Scratching the Surface
A 2013 retrospective on ‘Saving Gigabucks with Negawatts’ (1985)
Slowly, ponderously, but with gathering speed, the competitive forces my NARUC talk described 29 years ago are inexorably transforming the electricity business.
Negawatts aren’t yet allowed to compete head-to-head with supply in a third of the United States, utilities in 35 states are still rewarded for selling more electricity and penalized for cutting customers’ bills, and electric generation remains far more subsidized than efficient use. Yet as predicted, electricity’s share of end-use energy is rising while total electricity use is falling. Rocky Mountain Institute’s 2011 “grand synthesis,” Reinventing Fire, 1 found about 1 percent per year average demand shrinkage plausible to 2050, despite extra use for electric autos and average GDP growth of 2.4 percent per year.
Of course, a great many details have changed. Reinventing Fire found in 2011 that electric productivity could rise even more with plausible adoption during 2010 through ’50 than my 1984 NARUC talk and 1985 article, “Saving Gigabucks with Negawatts,” 2 claimed for full long-run adoption—but at just one-third the average cost, because today’s technologies and designs are far better than 1984’s. Even in such enormous quantities, modern efficiency techniques cost less than just operating any thermal power plant.
Not every technology mentioned in the article got to market, but so many others did that even today, “we have barely scratched the surface of how much efficiency is available and worth buying.” And far from petering out, negawatts are getting bigger and cheaper—not only by better technology but also by smarter design. The integrative design techniques 3 that Reinventing Fire reported for buildings, factories, and vehicles let good designers, with consistency and impunity, achieve expanding returns to efficiency investments.
Efficiency techniques keep evolving quickly. The compact fluorescent lamp described is now ubiquitous, durable (just last year I retired my last one at age 30), but nearly obsolete. My home’s latest lighting retrofit, its fifth since 1984, uses all LEDs, which continue to improve weekly. Modern LED luminaires make about as many lumens per watt as CFLs but can deliver them many times more effectively. Likewise, the center-of-glass insulating value of my home’s best windows today is nearly four times the “best commercially available” in 1984—and should again be surpassed later this year.
Even in heavy industry, our practice’s retrofit designs can often save around 40 to 60 percent of energy use and pay back in a few years, while new designs usually save even more, generally with lower capital cost. After that will come the next revolutions, like additive manufacturing, biomimetic design, 4 and atomically precise manufacturing. 5
Customers’ steadier purchases of efficiency help create the “new normal” of stagnant or falling demand described in these pages last December. 6 Yet a huge “overhang”