A 40year plan for energy Amory Lovins
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America’s public energy conversation
boils down to this question would you
rather die of a oil Wars or be climate
change or see nuclear holocaust or D all
of the above oh I missed one or e none
of the above that’s the one we’re not
normally offered what if we could make
energy do our work without working our
undoing
could we have fuel without fear could we
reinvent fire you see fire made us human
fossil fuels made us modern but now we
need a new fire that makes us safe
secure healthy and durable let’s see how
four-fifths of the world’s energy still
comes from burning each year four cubic
miles of the rotted remains of primeval
swamp goo those fossil fuels have built
our civilization they’ve created our
wealth they’ve enriched the lives of
billions but they also have rising costs
to our security economy health and
environment that are starting to erode
if not outweigh their benefits so we
need a new fire and switching from the
old fire to the new fire means changing
two big stories about oil and
electricity each of which puts two
fifths of the fossil carbon in the air
but they’re really quite distinct less
than 1% of our electricity is made from
oil although almost half is made from
coal their uses are quite concentrated
three-fourths of our oil fuels
transportation three-fourths of our
electricity powers buildings and the
rest of both runs factories so very
efficient vehicles buildings and
factories save oil and cold and also
natural gas that can displace both of
them but today’s energy system is not
just inefficient it is also in
disconnected aging dirty and insecure so
it needs refurbishment by 2050 though it
could become efficient connected
and distributed with elegantly frugal
autos factories and buildings all
relying on a modern secure and resilient
electricity system we can eliminate our
addiction to oil and coal by 2050 and
use one-third less natural gas while
switching to efficient use and renewable
supply this could cost by 2050 five
trillion dollars less in net present
value that is expressed as a lump sum
today then business as usual assuming
that carbon emissions and all other
hidden or external costs are worth zero
a conservatively low estimate yet this
cheaper energy system could support a
hundred fifty eight percent bigger u.s.
economy all without needing oil or coal
or for that matter nuclear energy
moreover this transition needs no new
inventions and no acts of Congress and
no new federal taxes mandate subsidies
or laws and running Washington gridlock
let me say that again I’m going to tell
you how to get the United States
completely off oil and coal five
trillion dollars cheaper with no act of
Congress led by business for profit in
other words we’re going to use our most
effective institutions private
enterprise Co evolving with civil
society and sped by military innovation
to go around our least effective
institutions and whether you care most
about profits and jobs and competitive
advantage or national security or
environmental stewardship and climate
protection and Public Health reinventing
fire makes sense and makes money General
Eisenhower reputedly said that enlarging
the boundaries of a tough problem makes
it soluble by encompassing more options
and more synergies so in reinventing
fire we integrated all four sectors that
use energy transportation buildings
industry and electricity and we
integrated four kinds of innovation not
just technology and policy but also
design and
business strategy those combinations
yield very much more than the sum of the
parts especially in creating deeply
disruptive business opportunities oil
costs our economy two billion dollars a
day plus another four billion dollars a
day in hidden economic and military
costs raising its total cost to over a
sixth of GDP our mobility fuel goes
three fifths to automobiles so let’s
start by making autos oil free
two-thirds of the energy it takes to
move a typical car is caused by its
weight and every unit of energy you save
at the wheels by taking out weight or
drag saves seven units at the tank is
you don’t have to waste six units
getting the energy to the wheels
unfortunately over the past quarter
century epidemic obesity has made our
two-ton steel cars gain weight twice as
fast as we have but today ultra light
ultra strong materials like carbon fiber
composites can make dramatic weight
savings snowball and can make cars
simpler and cheaper to build lighter and
more slippery autos need less force to
move them so their engines get smaller
indeed that sort of vehicle Fitness then
makes electric propulsion affordable
because the batteries or fuel cells also
get smaller and lighter and cheaper so
sticker prices will ultimately fall to
about the same as today while the
driving cost even from the start is very
much lower so these innovations together
can transform automakers from wringing
tiny savings out of Victorian engine and
steel stamping technologies to the
steeply falling costs of three linked
innovations that strongly reinforce each
other
namely ultralight materials making them
into structures and electric propulsion
the sails can grow and the prices fall
even faster with temporary fee baits
that is rebates for efficient new autos
paid for by fees on in
one’s and just in the first two years
the biggest of Europe’s five feeb eight
programs has tripled the speed of
improving automotive efficiency the
resulting shift to electric autos is
going to be as game-changing as shifting
from typewriters to the gains in
computers of course computers and
electronics are now America’s biggest
industry while typewriter makers have
vanished
so vehicle Fitness opens a new
automotive competitive strategy that can
double the oil savings over the next 40
years but then also make electrification
affordable and that displaces the rest
of the oil America could lead this next
automotive revolution currently the
leader is Germany last year Volkswagen
announced that by next year they’ll be
producing this carbon-fiber plug-in
hybrid getting 230 miles a gallon also
last year BMW announced this
carbon-fiber electric car they said that
its carbon fiber is paid for by needing
fewer batteries and they said we do not
intend to be a typewriter maker out he
claimed it’s going to beat them both by
year seven years ago and even faster and
cheaper American manufacturing
technology was used to make this little
carbon fiber test part which doubles as
a carbon cap in one minute and you can
tell from the sound how immensely stiff
and strong it is don’t worry about
dropping it it’s tougher than titanium
Tom Friedman actually who acted as hard
as he could with a sledgehammer without
even scuffing it but such manufacturing
techniques can scale to automotive speed
and cost with aerospace performance they
can save four-fifths of the capital
needed to make autos they can save lives
because this stuff can absorb up to 12
times as much crash energy per pound to
steel if we made our autos this way it
would save oil equivalent to finding one
and a half Saudi Arabia’s or half an
OPEC by drilling in the Detroit
formation a very perspective play and
all those
Detroit cost an average of 18 bucks a
barrel they are all American carbon free
and inexhaustible the same physics in
the same business logic also applied to
big vehicles in the five years ending at
2010 Walmart saved 60% of the fuel per
ton-mile in its giant fleet of heavy
trucks through better logistics and
design but just the technological
savings in heavy trucks can get to
two-thirds and combined with triple to
quintupled efficiency airplanes now on
the drawing board can save close to a
trillion dollars also today’s military
revolution in energy efficiency is going
to speed up all of these civilian
advances in much the same way that
military R&D has given us the Internet
the global positioning system and the
jet engine and microchip industries as
we design and build vehicles better we
can also use them smarter by harnessing
four powerful techniques for eliminating
needless driving instead of just seeing
the the travel grow we can use
innovative pricing charging for road
infrastructure by the mile not by the
gallon we can use some smart IT to
enhance transit and enable car sharing
and ride-sharing we can allow smart and
lucrative growth models that help people
already be near where they want to be so
they don’t need to go somewhere else and
we can use smart IT to make traffic
free-flowing
together those things can give us the
same or better access with 46 to 84
percent less driving saving another
point four trillion dollars plus 0.3
trillion dollars from using trucks more
productively so forty years hence when
you add it all up a far more mobile US
economy can use no oil saving or
displacing barrels for 25 bucks rather
than buying them for over 100 adds up to
a four trillion dollar net saving
counting all the hidden costs at zero so
to get mobility without oil to phase out
the oil we can get efficient and then
switch fuel
those hundred and twenty-five to 240
mile per gallon equivalent autos can use
any mixture of hydrogen fuel cells
electricity and advanced biofuels the
trucks and planes can realistically use
hydrogen or advanced biofuels the trucks
could even use natural gas but no
vehicles will need oil and the most
biofuel we might need just three million
barrels a day can be made 2/3 from waste
without displacing any cropland and
without harming soil or climate our team
speeds up these kinds of oil savings by
what we call institutional acupuncture
we figure out where the business logic
is congested and not flowing properly we
stick little needles in it to get it
flowing working with partners like Ford
and Walmart the Pentagon and the long
transition is already well underway in
fact three years ago mainstream analysts
were starting to see peak oil not in
supply but in demand and Deutsche Bank
even said world oil use could peek
around 2016
in other words oil is getting
uncompetitive even at low prices before
it becomes unavailable even at high
prices but the electrified vehicles
don’t need to burden the electricity
grid rather when smart autos exchange
electricity and information through
smart buildings with smart grids they’re
adding to the grid valuable flexibility
and storage that helped the grid
integrate varying solar solar and wind
power
so the electrified autos make the auto
and electricity problems easier to solve
together than separately and they also
converge the oil story with our second
big story saving electricity and then
making it differently and those twin
revolutions in electricity will bring to
that sector more numerous and profound
two diverse disruptions than any other
sector because we’ve got 21st century
technology and speed colliding head-on
with 20th and 19th century institutions
rules and cultures changing how we make
electricity gets easier if we need less
of it most of it now is wasted and the
technologies for saving
keep improving faster than we’re
installing them so the unbought
efficiency resource keeps getting ever
bigger and cheaper but as efficiency in
buildings in industry starts to grow
faster than the economy America’s
electricity use could actually shrink
even with the little extra use required
for those efficient electrified autos
and we can do this just by reasonably
accelerating existing trends over the
next 40 years buildings which use 3/4 of
the electricity can triple or quadruple
their energy productivity saving 1.4
trillion dollars net present value with
a 33 percent internal rate of return or
in English the savings are worth four
times what they cost an industry can
accelerate to doubling its energy
productivity with a 21 percent internal
rate of return
Nakia is a disruptive innovation that we
call integrative design that often makes
very big energy savings cost less than
small or no savings that is it can give
you expanding returns not diminishing
returns that is how our 2010 retrofit is
saving over two-fifths of the energy in
the Empire State Building
remanufacturing those six and a half
thousand windows on-site into Super
Windows that pass light but reflect heat
plus better lights and office equipment
and such cut the maximum cooling load by
a third and then renovating smaller
chillers instead of adding bigger ones
saved seventeen million dollars of
capital cost which helped pay for the
other improvements and reduce the
payback to just three years integrative
design can also increase energy savings
in industry dowas billion dollar
efficiency investment has already
returned nine billion dollars but
industry as a whole has another half
trillion dollars of energy still to save
for example three fifths of the world’s
electricity runs motors half of that
runs pumps and fans and those can all be
made more efficient and the motors
that turned them can have their system
efficiency roughly doubled by
integrating 35 improvements paying back
in about a year but first we ought to be
capturing bigger cheaper savings that
are normally ignored and are not in the
text books for example pumps the biggest
use of motors move liquid through pipes
but a standard industrial pumping loop
was redesigned to use at least 86
percent less energy not by getting
better pumps but just by replacing long
thin crooked pipes with fat short
straight pipes this is not about new
technology at just our rearranging our
metal furniture of course it also
shrinks the pumping equipment at its
capital costs so what does such savings
mean for the electricity that is 3/5
used in motors well from the coal burns
at the power plant through all these
compounding losses only a tenth of the
fuel energy actually ends up coming out
the pipe is float but now let’s turn
those compounding losses around
backwards and every unit of flow or
friction that we save in the pipe saves
10 units of fuel cost pollution and 100
levels cause global weirding back at the
power plant and of course as you go back
upstream the components get smaller and
therefore cheaper our team has lately
found such snowballing energy savings in
more than 30 billion dollars worth of
industrial redesigns everything from
data centers and chip fabs to mines and
refineries typically our retrofit design
and save about 30 to 60% of the energy
and payback in a few years while the new
facility design save 40 to 90 odd
percent with generally lower capital
cost now needing less electricity would
ease and speed the shift to new sources
of electricity chiefly renewables China
leads their explosive growth and their
plummeting cost in fact these solar
power module costs have just fallen off
the bottom of the chart and Germany now
has more solar workers than America has
Steelworkers already in about 20 states
private installers will come put those
cheap solar cells on your roof with no
money down and beat your utility bill
such unregulated products could
ultimately add up to a virtual utility
that bypasses your electric company just
as your cell phone bypass your wireline
phone company and the sort of thing
gives utility executives the
heebie-jeebies and it gives venture
capitalists sweet dreams in renewables
are no longer a fringe activity for each
of the past four years half of the
world’s new generating capacity has been
renewable mainly lately in developing
countries in 2010 renewables other than
big hydro particularly wind and solar
cells got a hundred and fifty 1 billion
dollars of private investment and they
actually surpassed the total installed
capacity of nuclear power in the world
by adding sixty billion watts in that
one year that happens to be the same
amount of solar cell capacity that the
world can now make every year a number
that goes up 60 or 70 percent a year
in contrast the net additions of nuclear
capacity and coal capacity in the orders
behind those keep fading because they
cost too much and they have too much
financial risk in fact in this country
no new nuclear power plant has been able
to raise any private construction
capital
despite seven years of hundred plus
percent subsidies so how else could we
replace the coal-fired power plants well
efficiency and gas can displace them all
at below just their operating costs and
combined with renewables can displace
them more than 23 times and less than
their replacement cost but we only need
to replace them once we’re often told
though that only : nuclear plants can
keep the lights on because they’re 24/7
whereas wind and solar power are
variable and hence supposedly unreliable
actually no generator is 24/7 they all
break and when a big plant goes down you
lose a thousand megawatts in
milliseconds often for weeks or months
often without warning
that is exactly why we’ve designed the
grid to backup failed plants with
working plants and in exactly the same
way the grid can handle window wind and
solar powers for castable variations our
early simulations show that largely or
wholly renewable grids can deliver
highly reliable power when they’re
forecasted integrated and diversified by
both type and location and that’s true
both for continental areas like the US
or Europe and for smaller areas embedded
within a larger grid that is how for
example for German States in 2010 were
43 to 52 percent when powered Portugal
was 45 percent renewable powered Denmark
36 and it’s how all of Europe can shift
to renewable electricity in America are
aging dirty and insecure power system
has to be replaced anyway by 2050 and
whatever we replace it with it’s got to
cost about the same about six trillion
dollars net present value whether we buy
more of what we’ve got or new nuclear
and so-called clean coal or renewables
that are or or less centralized but
those four futures at the same cost
differ profoundly in their risks around
national security fuel water finance
technology climate and health for
example our over centralized grid is
very vulnerable to cascading and
potentially economy shattering blackouts
caused by bad space weather or other
natural disasters or terrorist attack
but that blackout risk disappears and
all of the other risks are best managed
with distributed renewables organized
into local micro grids that normally
interconnect but can stand alone at need
that is they can disconnect fractally
and then reconnect seamlessly that
approach is exactly what the Pentagon is
adopting for its own power supply they
think they need that how about the rest
of us that they’re defending we want our
stuff to work too
and at about the same cost as
business-as-usual this would maximize
national security customer choice
entrepreneurial opportunity and
innovation together efficient use and
diverse dispersed renewable supply are
starting to transform the whole
electricity sector traditionally
utilities built a lot of giant : nuclear
plants and a bunch of big gas plants and
maybe a little bit of efficiency
renewables and those utilities were
rewarded as they still are in 34 states
for selling you more electricity however
especially where regulators are now
instead rewarding cutting your bills the
investments are shifting radically
toward efficiency demand response
cogeneration renewables and ways to knit
them all together reliably with less
transmission and little or no bulk
electricity storage so our energy future
is not fate but choice and that choice
is very flexible in 1976 for example
government and industry insisted that
the amount of energy needed to make a
dollar of GDP could never go down and I
heretic Lee suggested it could go down
several fold well that’s what’s actually
happened so far it’s fallen by half but
with today’s much better technologies
more mature delivery channels and
integrative design we can do far more
and even cheaper so to solve the energy
problem we just needed to enlarge it and
the results may at first seem incredible
but you know as Marshall McLuhan said
only puny secrets need protection big
discoveries are protected by public
incredulity now combine the electricity
in oil revolutions both driven by modern
efficiency and you get the really big
story reinventing fire
we’re business enabled and sped by smart
policies in mindful markets can lead the
United States completely off oil and
coal by 2050 saving 5 trillion dollars
growing the economy 2.6 fold
strengthening our national security oh
and by the way by getting rid of the oil
and coal reducing the fossil carbon
emissions
82 to 86 percent now if you like any of
those outcomes you can support
reinventing fire without needing to like
all of them and without needing to agree
about which of them is most important so
focusing on outcomes not motives can
turn gridlock and conflict into a
unifying solution to America’s energy
challenge this also turns out to be the
best way to cope with global challenges
climate change nuclear proliferation
energy insecurity energy poverty all of
which I’ll make us less safe now our
team at our my help smart companies to
get unstuck and speed this journey via
six sectoral initiatives with some more
hatching of course there’s still a lot
of old thinking out there to former
oilman Maurice strong said not all the
fossils are in the fuel but as Edgar
Willard who used to chair DuPont reminds
us in companies hampered by old thinking
won’t be a problem because he said they
simply won’t be around long term I’ve
described not just a once in a
civilization business opportunity but
one of the most profound transitions in
the history of our species we humans are
inventing a new fire not dug from below
but flowing from above not scarce but
bountiful not local but everywhere not
transient but permanent not costly but
free and but for a little transitional
tale of natural gas and a bit of biofuel
grown in ways that sustain and endure
this new fire is flameless efficiently
used it really can do our work without
working our undoing each of you owns a
piece of that five trillion dollar prize
and our new book reinventing fire
describes how you can capture it so with
the conversation just begun at
reinventing fire calm let me invite you
each to engage with us and with each
other and with everyone around you to
help make the world richer fairer cooler
and safer by together reinventing fire
thank you
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