As a reporter who writes about business and the environment, I've heard the expression "low hanging fruit" used to describe energy efficiency countless times. Google the words "low-hanging fruit energy efficiency" and you'll get 57,100 hits. Maybe 57,101 by now.
For the last month or so, I've been helping the Environmental Defense Fund write a report on business innovations and the environment. It's been a great learning experience, and we'll release the report next week at the FORTUNE Brainstorm Green conference. This work has helped answer a question that bugged me for years: Why don't people pick the low-hanging fruit?
The answer is that business does not operate according to classic free-market principles. Business is messier. Human emotions come into play. As does human perfection, and the fact that companies are rarely (ever?) the lean and well-oiled machines envisioned by classical economics.
This is why companies that could (and should) easily save energy and money by becoming more efficient don't.
Let me offer a couple of examples.
One comes from hotels. Hotels could save thousands of dollars a year by installing key-card systems that would automatically shut off the power whenever a guest leaves the room. A 616-room Westin hotel in Pittsburgh invested $120,000 in a key-card system and got all of that money back in energy savings in a year. After that, the hotel was free to use the savings to lower its room rates, increase its profits or both -- and in a world of truly competitive markets, others would be forced follow. That hasn't happened. Not in Pittsburgh or elsewhere.
And why not? Hotel owners apparently worry that some guests may not like the loss of control or the inconvenience of arriving at a slightly colder room in winter or slightly warmer room in summer -- even though the owners could keep room temperatures just a few degrees from 70 or 72 and guests could enjoy something else (lower costs, more amenities) in return for a few minutes of waiting for the room to heat or cool. By the way, travelers in Europe and Asia have come to expect the key card system. How do markets account for that?
A second and better example involves corporate computer networks. They waste a lot of energy because most computers run at night or on weekends. If you work in an office, you know that networks are controlled by IT departments who want access 24/7 to fix bugs or deal with security issues. They want power (electric and corporate), and they don’t, as a rule, care about wasting power (electric) because they aren't responsible for paying the electricity bills. They’ve got enough to worry about. That’s human emotion, too.
As it happens, there are software products out there that allow the IT guys to control the network and save energy at the same time. So far, though, these products haven't been selling widely. The people who pay the energy bills don’t buy software. The technical word for this in corporate America is "silos." Most companies have silos, and they are another reason why the low-hanging fruit keeps on hanging.
EDF's report, out next week, will highlight best practices in these two areas and others. We will also point to government policy that can help -- some states, for instance, give rebates to hotel owners who install the key-card systems because in the end efficiency benefits all of us. It means that collectively we will emit fewer greenhouse gases and that we won’t need as many new power plants.
So take a look at the report next week and check out EDF's new Innovation Exchange, which provides business people who want to improve their companies -- and the planet -- with valuable content, practical tools and a community of like-minded people. This post first appeared on EDF's Innovation blog.
And then do me a favor -- even if we can’t pick all the low hanging fruit right away, let's retire the metaphor.
Image by johnnyberg.
Get More Pay Less
On the IT infrastructure and existing buildings side there is a great remedy for gaining more capacity out of the existing electrical distribution system and saving energy at the same time. It's called mitigating or removing non-linear load currents from your power distribution system.
It eliminates electrical heat buildup and restores that wasted energy into fundamental electrical power for the enterprise to use, lowers air conditioning use as you are not removing heat, restores fundamental unused capacity in distribution transformers without having to oversize them, then de-rate their performance.
Simple stuff, inexpensive and has been around for 20 years. Oh yeah and that means added operating income to the enterprise, more usable power less demand on the utility. The technology is known as a harmonic suppression system.
It only looks easy
Marc,
Great that you are working with the EDF. Some really bright people over there but one word of caution - it rarely is as easy as it seems. All too often we face the law of unintended circumstances.
Take the cards - when I ran into them in India the desk clerks were so kind to point out that any card would work and to just leave one in the slot while out to keep the room at a "comfortable" temperature. In travels around the EU all too often the dispense a second or even third key so one isn't "bothered" with the power slot.
Net effect - millions and millions of plastic keys end up in land fills! Or worse they are still circling in the giant plastic wasteland in the Pacific that is now the size of Texas.
Now your computer example is an excellent case of behavior modification. Though the individiual unit energy savings is small when aggregated across a large enterprise the dollars, energy, CO2 saved are staggering. The folks at 1E in Europe, Verdium, and Cassatt in the US have some excellent tools to address this issue.
So far we have not seen anything but plus side benefits to using such power management tools. Of course one can go low-tech and just power everything off with a power strip. The power strip would logically have a much longer useful life than the IT attached equipment.
FYI - 45,700 references turned up in my Google search for low hanging fruit energy efficiency. Maybe Google's high-efficiency data center ran low on water!
Off base?
Your frustration at businesses not immediately reacting to cost savings is understood...but seems to me you're a bit off base here. Change is never easy, especially when there's a complex situation.
The hotel example is an interesting one. What is the benefit to the hotel customer of this system? If the benefit is price, the customer is likely unaware of it ($120K annually might mean less than $1 per night depending on the size of the hotel). Why doesn't some enterprising person create a certification system that the hotel can use to market it's efficiency?
Key here, it seems to me, is to put this in terms the average person (or at least the moderately environmentally conscious person) will understand:
- Gallons of gas
- Trees of CO2
By making this a marketable feature, at least some customers will be more prone to go to that hotel, and will certainly deal with minor inconvenience. Even with this, penetration will take time, but it's more likely.
On the IT front, that's a great idea...with an even harder to communicate externality. In many businesses, even the company itself doesn't pay for electricity because it's included in the rent. The only reason to shut stuff off is common sense environmental awareness.
So, create some simple mnemonic or rule of thumb for IT people and their "customers" as to why this is necessary:
- X hours off = a tree of CO2
- Count the computers, etc.
One particular challenge here which needs to be quantified is the impact on the equipment of all the power-cycling. For electronic components, this will generally have a negative effect on the lifetime of the device. I have some servers that have been running for seven years almost non-stop...and every time we need to touch them I wonder if they'll restart.
Further, most computers are loaded with stuff that not recycled responsibly, is pretty evil. And there's the energy and materials required for creating new computers. It may still be worth it, but someone more knowledgeable will need to do the math.
Perhaps some baby steps are in order: is the computer set to a variable power saving mode? (Many computers have a bunch of settings in the BIOS that allow for variable CPU speed, fan settings, and power-down or sleep of components).
Don't give up on the low hanging fruit!