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,...
Saving Gigabucks with Negawatts (1985)
In an age of costly electricity and cheap efficiency, smart utilities will sell less electricity and more efficiency.
Editor’s Note: This article originally was published in the March 21, 1985 issue of Public Utilities Fortnightly. It is reproduced here in slightly edited form — with a few corrections and with errata notes written by Lucien Smartt, then-editor, which were published in a subsequent issue. The original article was excerpted from the author’s presentation at the 96th annual convention of the National Association of Regulatory Utility Commissioners in Los Angeles, November 1984.
Original Foreword and Errata: The thesis of the following article is that in an age of costly electricity and cheap efficiency, as now, smart utilities will sell less electricity and more efficiency. They will market “negawatts” (saved electricity) and use new ways to finance their customers’ savings. Existing and future 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, improve cash flow, secure market share, save operating costs, and become once more a declining-cost industry.
Errata: Since the appearance of Amory B. Lovins’ article, “Saving Gigabucks with Negawatts,” in the March 21, 1985, issue of the Fortnightly, we have received numerous letters challenging the statement in the biographical paragraph written by the editors to accompany the article, that “Mr. Lovins was graduated from Harvard University and holds an MA degree from Oxford University and four honorary doctorates.” For the record, it should be stated that the list of credentials submitted by Mr. Lovins with his article made no claim of graduation or receipt of a degree from Harvard. It said simply, “Educated at Harvard and Oxford, he holds an Oxford MA and four honorary doctorates.” From this, the editors made an unjustifiable leap to an unwarranted conclusion that there had been a graduation from Harvard. One of our letter writers complained “that your magazine allows itself to be conned into perpetuating that myth” ( i.e., of considerable attainments in the world of academic higher education). To this charge, our plea is nolo contendere.For his part, Mr. Lovins has asked us to print a correction or clarification of a statement in the article (page 20) that, “In the best new office buildings from Reno to Stockholm, no space conditioning is needed.” He explains that “space conditioning” here means active space heating or refrigerative air conditioning, not evaporative cooling and other essentially passive techniques. This correction was proffered by the author too late for