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Power Points

A watt saved is a watt earned

If energy efficiency were a person, it would have eaten lunch alone at its high school cafeteria. It would have been the opposite of those fossil fuel jocks, who hip-checked efficiency into lockers, and likely on friendly terms with the hipster renewables bunch, who were too busy listening to bands you've never heard of and drinking cold brew to ever pay much attention. 

But efficiency doesn’t care. Efficiency has parents who love it very much and does exceedingly well at academics. And one day, it knows it will go on to bigger and better things. 

To this day, efficiency continues to be quiet and brilliant. According to analysis from Amory Lovins, gains in energy efficiency have done 30 times more in terms of reducing greenhouse gas emissions than renewable energy. 

Yet you wouldn’t know that by what gets the most airtime. A quick look into Google trends shows that efficiency gets Googled about a tenth of the amount of either "wind" and "solar."

However, gains in energy efficiency are slowing

This week, the International Energy Agency (IEA) released its annual look at energy efficiency, which revealed that the world’s energy use improved by only 1.2 percent — the third year in a row when the rate has weakened. That puts us in an energy efficiency recession of sorts. 

It’s a strange trend, as affordable technologies are available that would pay for themselves in reduced energy costs. It’s also a concerning trend, as this rate is far too slow to meet climate goals, which require a 3 percent annual improvement in efficiency gains. 

What’s behind the slowdown? 

The IEA highlights several factors behind the energy efficiency recession, including: 

  • A global increase in energy-intensive fuels for electricity generation, including coal (largely in Asia). 

  • Consumer demand for less efficient vehicles, including SUVs (which have increased from 35 million in 2010 to about 200 million today)(*jaw drop*).

  • Fewer new efficiency standards and policies. 

  • Extreme weather driving space cooling and heating.

  • An increase in heavy, energy-intensive manufacturing, especially in China’s steel sector and the United States’ petrochemical industry, driven by an uptick in natural gas extraction. 

Corporate commitments 

Many companies understand the business case for increasing energy productivity (getting more out of a unit of energy). It puts them in line with sustainability goals while saving money.

Climate Group’s EP100, a corporate commitment program that encourages companies to become more energy efficient, has 57 signatories. While that’s super, and includes some big names such as H&M and Hilton, it is about a quarter of the number of companies that have committed to the sister commitment RE100, which has 207 companies committing to 100 percent renewable energy. 

The potential of energy efficiency 

It’s a pity energy efficiency gains isn’t one of the central battlegrounds for emission reductions. It is uncontroversial (actually one of the few energy issues that enjoys bipartisan support) and could do a lot for the climate and the economy.

Through efficiency alone, IEA says we could get 40 percent of the way to the Paris climate goals. And if we were to have reached a 3 percent increase in efficiency during 2018, that would have generated an additional $2.6 trillion of economic output globally.  

According to Lovins, we are just scratching the surface of how efficient we can be, with innovations that are not only technical, but in design, business models and finance. 

What gives? 

If energy efficiency is a win-win, why isn’t it a higher priority? 

I have two ideas: 

  • Energy managers are always, constantly trying to get more out of every watt, but they talk about it way less. That’s because, unlike renewables, energy efficiency is hard to conceptualize. "Energy is invisible, and the energy you don’t use is almost unimaginable," Lovins told me in a phone conversation earlier this year.

  • Introducing system upgrades are expensive, and you don’t know what the payback truly will be until you’ve already committed the money. And that’s understandable. It’s also why new models are emerging to reduce upfront costs and offering subscription models. Organizations working on this include LightApp (for industrial manufacturing), Sparkfund (for equipment upgrades) and Carbon Lighthouse (which uses sensors to identify opportunities for savings). 

  • No one gets fired for keeping things the way they are. Just ask David Crane.

What do you think it would take to make deep energy efficiency a priority for the private sector? Let me know: [email protected]

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