Last week I devoted several postings to the policy options available to improve our energy security, mostly focused on liquid fuels for mobility. After transportation, however, electricity makes up the next largest aspect of energy demand we would need to manage, as part of a comprehensive approach to energy security. Electricity demand has been growing faster than petroleum for years, because of its direct linkage to economic growth and the popularity of increasing numbers of electric gadgets. The policy dilemma here exactly mirrors that for transportation: do you reduce the rate of consumption growth by clamping down on current usage, or do you focus on making new electrical devices more efficient? As with transportation, though, because of the large installed base, the latter represents something of a slow-motion attack on the problem. Fortunately, there are better solutions for reducing electricity usage than there are for reducing oil demand. This week's energy report from the Wall Street Journal listed 10 options that are achievable with existing technology, though not necessarily with existing regulations.
There's been a longstanding debate about whether efficiency, sometimes referred to as negative Watts or "nega-watts," belongs on the supply or demand side of the equation. Though something of a purist on this topic, I'm sympathetic to those who see efficiency as directly equivalent to additional supply. In fact, when we look at primary energy, electrical efficiency has a large multiplier effect, because only a fraction of the energy content of the upstream fuel, be it coal, natural gas or uranium, flows out of the grid as useful electrons. If average overall electric generation and transmission efficiency is about 30%, then every kiloWatt-hour saved translates into three times its energy equivalent in fuel savings at the power plant.
Many of the Journal's suggestions are old news, including efficient lighting--though there's a revolution coming with LED lighting--better electric motors, higher efficiency standards for buildings and appliances, and time-of-day electricity pricing. And this list doesn't even include such blindingly-obvious measures as turning off lights and unused devices. The Journal ignores some of the feedback between different initiatives, though. For example, while time-of-day pricing--which many businesses already have--increases the incentive for changing out old, inefficient motors, it reduces the benefit of replacing home incandescent lighting, which is mostly used when off-peak rates apply. In any case, these effects are unlikely to overwhelm the potential combined impact of these initiatives.
Some of this will happen without intervention by the federal government. What's at issue here is a national effort that goes well beyond the 1 or 2% per year improvement that will occur simply as a result of people and businesses getting smarter about managing their energy costs. Efficiency has never been as glamorous as arguing about the next coal or nuclear plant, but its impact is much broader and takes much less time to be felt. And if we're looking for energy initiatives with unambiguously positive cost/benefit ratios, nega-watts are fertile ground, indeed, compared with the cost of subsidizing alternative fuels or incentivizing new auto technology. If lowering our demand for transportation energy seems difficult and complex, improving electric efficiency looks far easier by comparison. This area seems like an obvious candidate for some quick wins.